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The Coming Battle 












In this volume the author endeavors to give an 
accurate history of the present National Bank System 
of currency, including an account of the first United 
States Bank, — both of which were borrowed from 
Great Britain by those statesmen who, like the father 
of Sir Robert Peel, believed that a national debt was 
the source of prosperit3^ 

It is believed that the facts adduced in the following 
pages will be productive of some good, in pointing out 
the immense evils lurking in that system of banking, 
— a system which has produced panics at will, and 
which is the active abettor of the stock gamblers, rail- 
road wreckers, and those industrial tyrants of modern 
times, the enormously overcapitalized and oppressive 

It is sought to point out the great dangers of delegat- 
ing purely government powers to these greedy monopo- 
lists, by which they are enabled to organize a money 
trust, far more tyrannical than all the other combina- 
tions now in existence ; and by which they absolutely 
defy the authority that endowed them with corporate 

The issue between these banks and the people will 
be joined in the near future, and the greatest struggle 



the world ever witnessed will take place between the 
usurping banks on the one hand and the people on the 

In the nature of things, unjustly acquired power of 
man over man generally rises to such heights of arro- 
gance as to eventually create a public opinion that will 
grind tyranny of every form to atoms, hence. The 
Coming Battle that will surely take place in the near 
future and the victory that will be won by justice will 
be the noblest events in American history. 

The Author. 



I. Origin of the Money Power in America 7 

II. Origin of the Present National Banking System 43 

III. National Banks and Silver 89 

IV. Conspiracy of New York and London Bankers and 

Bondholders to Demonetize Silver 109 

V. Efforts to Remonetize Silver and Preserve the Green- 
back 158 

VI. The National Banks Wage War Upon the Credit of 

the United States 203 

VII. National Banks Secure a Continiiation of Their 

Existence 236 

VIII. The National Banking Money Power Secures Com- 
plete Control of the Treasury 270 

IX. Money Power of England and United States Combine 

to Annihilate Silver 304 

X. National Banking Money Power Brings on the Panic 

of 1893 325 

XI. Special Session of Congress Repeals the Sherman Law 362 
XII. Senate Votes for Repoal 384 

XIII. Efforts of Administration to force Carlisle Bill through 

Congress . : 407 

XIV. National Banks and the Administration Combine 

to Issje Bonds in Tin: e of Peace 439 

XV. Campaigns of 1896 460 



* 'Justice, full and ample justice, to every portion of 
the United States, should be the ruling principle of 
every freeman, and should guide the deliberations of 
every public body, whether it be state or national. ' ' — 
Andrew Jackson. 

During the existence of the human race, from the 
earliest dawn of civilization to the close of the present 
century, the power exercised over the industry, prop- 
erty and conscience of man by cunning and ambition, 
has assumed many forms. 

The form of power which first appeared to oppress 
and plunder the race, was exemplified in those cele- 
brated conquerors of antiquity, who traversed the earth 
in their bloody careers, transforming blooming fields 
and rich and populous cities into deserts, overthrowing 
whole nations, sacrificing on the battle fields countless 
myriads of their fellow men — merely to satisfy a species 
of madness dignified by the name of ambition. 

Another and a more dangerous form of misapplied 
power resulted from the intellectual tyranny exercised 
by that shrewd class, the priest-hood, over the con- 
science and religious beliefs of the great mass of 

From the days of the Pharaohs down to this period, 
man, from his instinctive veneration for a supreme 
being, has been so peculiarly susceptible to the arts, 


wiles, and cunning of priest-craft to such a degree 
as to excite universal surprise. 

Those gross superstitions, engrafted*on the inherent 
religious nature of man, by that wary intellectual 
superiority, which weighed down the noblest traits of 
the human mind ; which bred bitter religious animos- 
ities ; unheard of extortions by the corrupt and infam- 
ous priestly aristocracies of various so-called religions, 
were the well-matured and craftily-devised schemes 
for plunder by designing men. 

It is almost inconceivable that the ancient Egyp- 
tians, that admirable race, whose noble genius and 
wonderful energy reared those stately temples, the 
magnificent cities, and the stupendous pyramids along 
the valley of the Nile, should worship the man-eating 
crocodile, the savage vulture, the grinning ape and the 
crawling lizard. 

This race is an example of that soul-darkening 
superstition which hung like a pall over the intellect 
of man. 

The countless wars which afflicted Europe, Asia, and 
Africa for nearly eighteen centuries; which drowned 
the finest aspirations of humanity in blood ; which des- 
olated the fairest parts of the earth ; which stemmed 
the tide toward a higher and a grander civilization, 
sprang from the base superstitions originated by the 
grasping priesthood, who lived in sloth and luxury 
upon the labor of the deluded mass of mankind. 

The celebrated Vattel, in the twelfth chapter of that 
noble work, The Law of Nations, affords us a faint 
idea of the enormities practiced upon the people of 
Europe by the clergy. 

Taine, in his History of France, shows that the 


ecclesiastics had seized upon the most valuable and fer- 
tile portion of the territory of that country, and that 
the oppression practiced by them upon the French 
people was one of the leading causes of the great 

The third and most insidious and most dangerous 
form of power that has yet appeared to threaten the 
material well-being of the race; which now holds 
every civilized and semi-civilized people in its merci- 
less grasp ; which is appropriating to itself the produc- 
tive energies of the world ; which is subordinating the 
press, the pulpit, and the statesmen of the day to its 
ambitious ends ; which openly boasts of its nefarious 
m.ethods in the courts, legislatures, and other parlia- 
mentary bodies of nations, is the modern money power. 

That there is a gigantic combination of the money 
dealers, a powerful international trust of usurers, 
asserting a superiority above all jurisdictions, and hav- 
ing for its servants the so-called statesmen and poten- 
tates of various nations, who willingly register the 
decrees of this money power upon the statute-books of 
the respective states, is a fact that can be sustained by 
irrebuttable evidence. 

This great international monetary trust now menaces 
the very life of this nation, and the people must 
dethrone it and subordinate it to their will, or American 
liberty will vanish. 

The Declaration of Independence, which announced 
the true principles of government, was a memorable 
protest against the rapacious money power composed 
of the landed aristocracy, the trading, commercial, and 
manufacturing interests of England, which, by a long 
series of vicious and unconstitutional acts of Parlia- 
ment, sought to eat out the substance of the colonists. 


The war of the Revolution which followed, set its 
seal of approval upon the patriotic efforts of the colo- 
nists against oppression, and freedom was achieved. 

Upon the conclusion of that most righteous conflict, 
a more perfect union was formed to establish justice, 
insure domestic tranquillity, provide for the common 
defense, promote the general welfare, and secure the 
blessings of liberty for themselves and posterity by 
the adoption of the Federal constitution. 

General Washington was chosen the first President 
by an unanimous vote. 

For his constitutional advisers he appointed Thomas 
Jefferson for Secretary of State ; Alexander Hamilton 
for Secretary of the Treasury ; James Knox for Secretary 
of War ; and Edmund Randolph for Attorney General. 

Jefferson, who was the most accomplished scholar in 
America, the profoundest thinker upon the principles 
of Government of any age, the friend of humanity and 
a staunch believer in the capacity of the common peo- 
ple for self-government, was a representative of that 
industrial element which sustains society by its labors. 

Hamilton, who was an aristocrat by birth and breed- 
ing, and who was connected by marriage with the 
wealthiest family of the landed aristocracy of New York, 
was a strong representative of the trading, banking 
and commercial element of New York City and New 
England, which constituted the Tory element of the 

The presence of two statesmen of such wholly antag- 
onistic views and temperaments in the cabinet of 
Washington, naturally originated divisions of political 
sentiment, from which sprang two great political 


One of the first measures which received the aid and 
sanction of Hamilton was the act of Congress, adopted 
February 25, 1791, chartering the Bank of the United 
States. -^ 

Jeffefson, whose penetrating mind perceived the vast 
power for mischief lodged in an institution of that 
nature, in a powerful communication to the President, 
advised him to veto the bill. 

Washington, however, accepted the views of Ham- 
ilton, his Secretary of the Treasury, and signed the bill, 
and it became a law. 

By the terms of the act incorporating the bank, its 
capital was fixed at ten millions of dollars. The power 
to issue its circulating notes as money having full legal 
tender quality for the payment of taxes and demands 
due the Government was conferred upon it. It was 
made the depositary of the revenues of the Government, 
and therefore it became the fiscal agent of the Treasury 
department. It was chartered for the period of twenty 

For the extensive powers and exclusive privileges 
bestowed upon it by Congress, the bank paid the 
United States a small bonus. 

This bank, therefore, was a monopoly sustained by 
the credit and the revenues of the United States. It 
had the sole power of issuing legal tender paper money, 
and its actual capital was trebled in its earning capac- 
ity by loaning its circulating notes at interest, and by 
having the control of the government revenues. 

This was the first appearance of an organized money 
POWER in the United States. 

Thomas Jefferson, by voice and pen, in language of 
rare power and felicity, pointed out the dangerous 


possibilities of the bank to influence the politics and 
business of the nation. 

In a letter to Madison in 1793, Jefferson stated that 
the bank party consisted of the fashionable circles of 
Philadelphia, New York, Boston and Charlest(5h (nat- 
ural aristocrats). 2. Merchants trading in British 
capital. 3. Paper men. Against the bank were^ — i. 
Merchants trading on their own capital. 2. Irish mer- 
chants. 3. Tradesmen, mechanics, farmers and every 
other possible description of our citizens. 

In 181 1, Congress refused to re-charter the bank, and 
as it had during its brief career obtained the mastery 
over the entire business of the country by its loans of 
circulating notes and the public revenues, and had 
built up a system of credit in the commercial centers, 
to intimidate Congress and the people, it made a con- 
certed contraction of the currency and brought on the 
great panic of 181 1. 

United States Senator Benton, in a speech in the 
senate during the administration of Jackson, thus 
graphically states the manner in which the bank con- 
trived to manufacture public sentiment in its favor- 
He says: — 

"All the machinery of alarm and distress was 
in as full activity at that time as at present, and 
with the same identical effects — town meetings, me- 
morials, resolutions, deputations to congress, alarming 
speeches in congress. The price of all property was 
shown to be depressed. Hemp sunk in Philadelphia 
from $350 to $250 per ton; flour simk from $11.00 per 
barrel to $7. 75 ; all real estate fell thirty per cent. ; five 
hundred houses were suspended in their erection ; the 
rent of money rose to one and a half per month on the 
best paper; confidence destroyed; manufactories 
stopped; workmen cfismissed and the ruin of the 
country confidently predicted." 


The Senator goes on to show that great public meet- 
ings were held, inflammatory speeches made, cannon 
fired, great feasts given— all engineered by the bank. 
That those members of Congress who favored the bank, 
traveled with public honors like conquering generals 
returning from victorious battlefields, saluted with 
acclamations by the masses, escorted by processions, 
and that those members favoring the bank were 
exhibited throughout the United States as though they 
w^ere some superior beings from the celestial regions. 

In 181 2 occurred the second war with England, and 
the bank threw its whole influence against the United 
States during that great struggle. 

Evidence is not wanting to sustain the charges made 
that the bank element of New England planned the 
separation of that section from the Union. 

During the continuance of this war, the United 
States issued its treasury notes with full legal tender 
power, and they were gladly received by the people. 

Albert Gallatin, for twelve years Secretar)^ of the 
Treasury, and one of the ablest statesmen of the day, 
thus bears valuable testimony to the efficiency of gov- 
ernment paper money in carrying the United States 
through that war. He sa3's: — 

"The paper money carried the United States through 
the most arduous and perilous stages of the war, and 
though operating as a most unequal tax, it cannot be 
denied that it saved the country. ' ' 

In a letter to John Tyler, May 28, 1816, Jefferson 
says : — 

"The system of banking we have both equally 
and ever reprobated. I contemplate it as a blot left in 
all our constitutions which, if not covered, will end in 
their destruction, which is already hit by the gamblers 


in corruption, and is sweeping- away in its progress the 
fortunes and morals of our citizens. Funding I con- 
sider as limited rightfully to a redemption of the debt 
within the lives of a majority of the generation con- 
tracting it; every generation coming equally by the 
laws of the Creator of the world to the free possession 
of the earth He made for their subsistence unincum- 
bered by their predecessors. And I sincerely believe 
with you that banking institutions are more dangerous 
than standing armies, and that the principle of spend- 
ing money to be paid by posterity under the name of 
funding is but swindling futurity on a large scale." 

In a letter of March 2, 181 5, written by Jefferson to 
the celebrated French author, Say, he said: — 

"The government is now issuing treasury notes for 
circulation, bottomed on solid funds and bearing inter- 
est. The banking confederacy (and the merchants 
bound to them by their debts) will endeavor to crush 
the credit of these notes; but the country is eager 
for them as something they can trust to, and so soon 
as a convenient quantity of them can. get into circula- 
tion the bank notes die." 

It has been stated that the bank, during the war of 
181 2, exerted its whole influence against the United 
States. It was a matter of little concern to it that 
Great Britain had impressed into her service thousands 
of native born citizens of this country, and compelled 
them, against their will, to man British guns. What 
cared the bank that hundreds of American merchant 
vessels were confiscated, in a time of profound peace, 
by orders of the English government, and that re- 
peated insults had been heaped on this republic by the 
insolence of British statesmen? 

Although the bank was a creature of the legislative 
powers of congress, and had received vast financial 
benefits from the country, it sought to embarrass the 


government in its struggle against Great Britain by- 
arraying the moneyed class against the struggling 

Money could not be obtained by means of loans to 
organize, arm, and equip the American armies and to 
construct vessels of war to protect American com- 
merce. In this emergency the counsel of Jefferson 
was requested, and he advised the issue of treasury 
notes by the government in lieu of borrowing. 

In a letter dated September ii, 1813, he thus stated 
his position: ''The question will be asked, and ought 
to be looked at, What is to be the course if loans cannot 
be obtained?" There is but one — "Carthago delenda 
est.** Bank paper must be suppressed, and the circu- 
lating medium must be restored to the nation to whom 
it belongs. It is the only fund on which they can rely 
for loans ; it is the only resource which can never fail 
them, and it is an abundant one for every necessary 
purpose. Treasury bills, bottomed on taxes, bearing 
or not bearing interest, as may be found necessary, 
thrown into circulation will take the place of so much 
gold and silver, which last, when crowded, will find an 
efflux into other countries, and thus keep the quantum 
of medium at its salutary level. Let the banks con- 
tinue, if they please, but let them discount for cash 
alone or for treasury notes. ' ' 

The sound advice couched in this letter was heeded 
by the government, and the country was carried safely 
through the second war for independence. 

Immediately after the close of the war, the bank put 
forth renewed efforts to secure a new charter. 

At this juncture, William Cobbett, the celebrated 
English writer and economist, transmitted a letter to 


i\lr. Dallas, Secretary of the Treasury under President 
Madison, in which he strenuously urged him to oppose 
the project. 

As a warning against chartering a bank of issue, 
Cobbett pointed out the immense power of the Bank 
of England to ruin the tradesmen of that country, and 
to dictate the political sentiments of that people. He 
said : — 

London, January 13, 181 6. 
"To Mr. Secretary Dallas: 

"Sir: I have read with great care and uncommon 
interest your proposition to congress, under date of 
6th December, 18 15, for the establishment of a national 
bank; and as a part of the reasons which you urge in 
support of that proposition appear to be founded on 
the experience of a similar institution in England, I 
cannot refrain from endeavoring to show you what 
some of these effects really have been, and what is at 
present the situation of this country, owing, in a great 
measure, to the existence of a great banking establish- 
ment closely connected with the government. 

"It is the evil of a national bank, as experienced by 
us, to which I particidarly wish to draw your attention. 
You profess, and I dare say very sincerely, so to frame 
this establishment in America that it shall be independ- 
ent of the Government. It is next to impossible, in- 
deed, that you, or any of the persons in whose hands 
the Government is, should have a desire to make a bank 
what our bank has long been ; but while there is a 
possibility of its .becoming, in any hands or at any 
time, anything resembling this bank, it must be a 
matter of serious dread to every friend of America that 
such an establishment is likely to take place. Sir, it 
is as a bank of discount that this establishment exer- 
cises the most pernicious influence. The directors, 
w^ho are a chosen divan, regulate these discounts, and 
in so doing decide in some sort upon the rise or fall, 
the making or the ruin, of all men in trade, and indeed 


of most other men, except such as liave no capital 
at all. 

"The amount of these discounts at any given time is 
supposed to be about ;^6, 000,000, as they are never for 
more than two months. Here is a sum of thirty-six 
millions lent every year to individuals. The bills for 
discounts are sent in; the directors consent or not, 
without any reasons assigned. Now, sir, consider the 
magnitude of the sum discounted. It is little short of 
half a million dollars a day, Sundays excepted. It is 
perfectly well known to you that in state of such 
things almost every man in trade is under the necessity 
of having a regular supply from discounting. If he 
be excluded from his fair share here, he cannot trade 
with the same advantage as other men trade. If he 
be in the practice of discounting, and if his discounts 
be cut off, he cannot go on; he stops payment and is 
frequently ruined forever, even while he possesses 
property which, with the fair chances of tmie, v\^ould 
not only enable him to pay his debts but to proceed in 

"I beseech you, then, sir, to look seriously at the 
extent of' the dangerous power of these bank directors. 
You must see that they hold in their hands the pecun- 
iary fate of a very large part of the community, and 
that they have it in their power, every day of their 
lives, to destroy the credit of many men, and to plunge 
their families into shame and misery. If I am asked 
for their motives to act like these, to pursue such par- 
tiality, to make themseU^es the instruments in commit- 
ting such detestable injustice and cruelty, need I point 
out to you that they have been and must be constantly 
pctuated- by the strongest political prejudices? The 
fact is, however, that the Bank of England, by means 
of its power of granting or withholding discounts, has 
been, and is one of the most potent instruments of 
political corruption, on the one hand, and of political 
vengeance on the other hand. " 

In speaking of the great profits reaped by that bank, 
this writer said : — 



"I have given this rough statement that you may be 
struck with the magnitude of the object I present to 
you. Diminish the amount as much as you fairly can 
and even then you will dwell upon the subject with a 
deliberation you cannot prevent. One fact will at 
least corroborate what I have suggested ; viz. , that the 
Bank of England had ^^20, 000,000, or nearly $100,- 
000,000, surplus in nineteen years, after paying bonuses 
and dividing 7 per cent, per annum, which was two 
fifths more than legal interest. I will not here allude 
to the United States Bank, to which I may hereafter 
devote an essay. ' ' 

The array of facts set out by this writer, in which 
he exhibited the appalling power of this bank, did not 
deter the American statesmen of that day from their 
attempt to fasten a like institution on this country. 

In 1 81 6, congress chartered the United States Bank 
with a capital stock of thirty-five million dollars; to it 
was delegated the sole power of issuing notes receiv- 
able by the United States for taxes and demands due 
it ; and designed to serve as the Treasury Department of 
the government by receiving and disbursing the public 
revenues of the nation. 

Section 21 of the Bank Act was as follows: — 

"That no other bank shall be established by any 
future law of the United States, during the continuance 
of the corporation hereby created, for which the faith of 
the United States is hereby pledged. Provided, Con- 
gress may renew existing charters for banks within the 
District of Columbia, not increasing the capital thereof, 
and may also establish any other bank or banks in said 
District, with capitals not exceeding, in the whole, six 
millions of dollars, if they shall deem it expedient." 

By this section Congress surrendered its constitu- 
tional powers to legislate upon a subject within its 
exclusive jurisdiction for the period of twenty years. 


Not satisfied with a monopoly of the currency and 
banking of the country, the unlimited greed of the 
wealthy stockholders of this bank demanded and 
secured from Congress, a pledge of the public faith 
that the essential powers of the Government should lie 
dormant for twenty years ! 

In the early days of the republic, the accursed spirit 
of special privileges had shorn the nation of its means 
of self-preservation. 

For the exclusive powers conferred upon it, the gov- 
ernment received in return for this valuable franchise 
a small annual bonus. 

It will be ascertained from the enormous powers 
enjoyed by the bank, that it obtained a monopoly of 
the circulating medium of the country; that, in addi- 
tion to its capital stock of thirty-five million dollars 
which constituted its primary loanable fund, it would 
earn interest upon the circulating notes issued by it, 
as well as usury upon the government revenues when 
used in discounts. 

Therefore, by force of law, the interest earning 
capacity of its capital was more than doubled. 

It was a colossal moneyed monopoly. 

The bank rapidly obtained a practical control over 
the business of the nation, and it would tolerate no 
opposition. By its methods of conferring substantial 
favors upon the influential journals of the leading 
commercial cities, and by its loans to powerful mem- 
bers of both branches of Congress, it was enabled to 
rally to its support a coerced and manufactured public 
sentiment — far-reaching and wide-spread as the limits 
of the Union. 

The financial power of the bank, under its able and 


unscrupulous management, had become so dominant 
in its influence that it deemed itself master of the gov- 
ernment and the people. 

This monopoly believed in the Hamiltonian maxim 
that a "Public debt is a public blessing," and, during 
its career as the fiscal agent of the Government, threw 
every obstacle in the way of the payment of the 
national debt. 

It inay be inquired by some why the bank should 
oppose the payment of the debt? The reason is obvi- 
ous. The larger the debt, the more revenues necessary 
to pay the interest charge thereon, and, therefore, the 
more profit to the bank from the use of the increased 
revenues in making loans and discounts. 

From 1816 to 1828, it was the sole arbiter of the 
financial affairs of the nation, both public and private. 
Its power in politics was immense, and it swayed elec- 
tions at will. 

The most eloquent Senators and Representatives 
were continually sounding its praises in the halls of 
Congress as the most perfect financial institution ever 
devised by the wit of man. Deluded with the idea 
that it was invincible in its influence, and that it was a 
necessary part of the machinery of Government, it was 
confident that its charter would be renewed before its 
expiration by limitation of law. 

The audacity of the bank was destined to receive a 
check in its career of uninterrupted power and success, 
and its astonishing abuses of its franchise were to be 
mercilessly exposed, and it was doomed to fall never 
to rise again. 

In the presidential election of 1828, Andrew Jackson, 
the hero of New Orleans, was elected chief magistrate 


by a great majority, and the bank, its defenders, and 
retainers, were fated to run counter to a patriot and 
statesman of invincible will and unflinching integrity. 

At the time of this election, and prior thereto, the 
public debt was being reduced rapidly, and it would 
not be long before the United States would not owe a 
single dollar. 

As has been stated, the United States bank strongly 
opposed the payment of the debt for the aggrandize- 
ment of its own selfish purpose. 

On the 8th day of December, 1829, President Jack- 
son, in his first annual message to Congress, announced 
to that body that he was opposed to the bank, and 
that he would not favor a renewal of its charter. In 
the year 1830, a large surplus of public revenues 
accrued to the United States, and according to law, 
the money was deposited in the bank. This accumula- 
tion of revenues served to augment the power of the 
bank as it increased its resources, and, therefore, its 
facility to make additional loans and discounts in the 
various commercial centers of the country. 

President Jackson discerned the policy of the bank, 
and in 1830 he advocated the passage of a law distrib- 
uting these surplus revenues among the states. He 
again opposed the renewal of its charter. 

United States Senator Benton, of Missouri, a man of 
great energy, extensive learning, and commanding 
ability, thoroughly understood the means by which the 
bank had obtained its mastery over the commerce and 
industry of the nation, and, therefore, at that session 
of congress, he presented a resolution in the United 
States senate to the effect, that the charter of the bank 
ought not to be renewed. The resolution was lost by 


a vote of twenty-three to twenty. The introduction of 
that resolution and the narrow majority by which it 
failed of passage, sounded a note of warning to the 
bank, and it gathered all its energies for the struggle 
that sooner or later was bound to come. 

To arouse public sentiment in its behalf, it initiated 
a policy of expanding its loans until they reached the 
vast total of seventy-one million dollars, which were 
so judiciously placed among leading merchants and 
manufacturers, that, in the event of their being called 
in by the bank, a powerful pressure would be exerted 
upon the President and Congress by those who were 
borrowers of the bank. 

On the 4th of July, 1832, a bill to re-charter the 
bank, after its passage by Congress, was sent to Presi- 
dent Jackson for approval. 

Many of the influential political friends of the Presi- 
dent, aware of his intense hostility toward the bank 
and its methods, importuned him to sign the bill; 
large delegations of leading citizens from every trade 
center in the country implored him to allow the meas- 
ure to become a law. Merchants and importers, who 
were heavy borrowers from the bank, trooped to 
Washington to add their appeals to the petitions 
already presented. 

Its paid hirelings, in the halls of congress and else- 
where, predicted dreadful results to business interests, 
should the President not recede from his opposition to 
the bill continuing the existence of the bank for the 
period of twenty years longer. 

To add to the general clamor, the bank, through its 
officials, avowed its purpose to precipitate a panic, and 
to pull down in ruins the business of the country, 


should its demands not be conceded. It compelled its 
thousands of borrowers to sign distress petitions, which 
it caused to be sent to the President as the apparently- 
free expression of public sentiment. 

The magazine had long been prepared by the bank, 
the train was laid, and Nicholas Biddle, the president 
of this great financial institution, sat in his luxurious 
office, and declared himself ready and willing to apply 
the match that would start the most ruinous financial 
explosion that had yet shook the foundations of the 
republic. Mr. Biddle had most able lieutenants in 
both branches of congress devoted to his interest. 

Daniel Webster, the eloquent orator and great law- 
yer; Henry Clay, whose persuasive powers were un- 
rivaled ; and Calhoun, the great leader of the South, 
led the banking interest in congress. 

In a work entitled, "Andrew Jackson and the Bank 
of the United States," William L. Royall thus speaks 
of the conduct of these three leaders : — 

*'In addition to all its other sources of power the 
cause of the bank received invaluable assistance from 
the coalition of these great men (Webster, Clay, and 
Calhoun). Each was an aspirant for the presidency, 
and upon the bank's cause and paper money, each 
found a common ground upon which all three could 
meet and oppose Jackson, the great enemy of both 
these things. All the movements of the bank were but 
a repetition, with a change of names and dates, of what 
had taken place in 1811." 

On the other hand, the stalwart Benton was a stern 
opponent of the bank, and he was supported by an able 
array of statesmen of the first rank. 

Webster and Clay advocated a liberal construction of 
the Constitution, and were eternally sounding the 


praises of that instrument as the noblest work of 
statesmanship, yet, while ascribing to it the most 
ample powers and authority, they strangely supported 
the theory that the United States Bank was absolutely 
necessary to the financial administration of the Federal 

Benton was a strict constructionist, and asserted 
that the general Government was inherently qualified 
to transact its financial operations without the aid or 
assistance of any bank or system of banks. He ably 
maintained the Jeffersonian principles of Government 
that bank paper should be suppressed. 

In a speech delivered in the United States Senate, 
Benton thus truly describes the immense power of the 
bank over the Government and the people : — 

"The Government itself ceases to be independent, it 
ceases to be safe when the national currency is at the will 
of a company. The Government can undertake no great 
enterprise, neither war nor peace, without the consent 
and co-operation of that company ; it cannot count its 
revenues six months ahead without referring to the 
action of that company — its friendship or its enmity, 
its concurrence or opposition — to see how far that 
company will permit money to be scarce or to be plen- 
tiful ; how far it will let the money system go on reg- 
ularly or throw it into disorder; how far it will suit the 
interest or policy of that company to create a tempest 
or suffer a calm in the money ocean. The people are 
not safe when such a company has such a power. The 
temptation is too great, the opportunity too easy, to 
put up and put down prices, to make and break for- 
tunes ; to bring the whole community upon its knees to 
the Neptunes who preside over the flux and reflux of 
paper. All property is at their mercy, the price of 
real estate, of every growing crop, of every staple 
article in the market, is at their command. Stocks are 


their pla3'things — their gambling theater, on which 
they gamble daily with as little secrecy and as little 
morality and far more mischief to fortunes than com- 
mon gamblers carry on their operations." 

This unanswerable argument, built on impregnable 
facts, could not be met by all the eloquence and logic 
that could be mustered against it by the great Trium- 
virate — Clay, Webster and Calhoun. 

In a message to Congress, President Jackson, in 
speaking of the banking power, said: — 

"In this point of the case the question is distinctly 
presented, whether the people of the United States are 
to govern through representatives chosen by their unbi- 
ased suffrages, or whether the power and money of a 
great corporation are to be secretly exerted to influ- 
ence their judgment and control their decisions." 

These pointed shafts from the executive struck 
home, and rankled in the breasts of those Senators and 
Representatives who supported the bank and its policy. 

When the bank ascertained beyond any doubt that 
President Jackson was firmly opposed to its further 
continuance, it began calling in its loans rapidly, the 
volume of currency was contracted greatly by the bank 
and its branches, merchants were mercilessly driven 
to the wall, mills and factories closed down every- 
where, and tens of thousands of skilled workmen were 
thrown out of employment, and their families felt the 
pangs of hunger, notwithstanding there was abundance 
in the country. 

Every day it tightened its coils around its helpless 
victims, while President Biddle sat in his office at the 
bank, and laughed at the needless ruin he wrought 
among his fellowmen. His course is only paralleled 
by that of Nero, who is said to have fiddled while Rome 
was burning. 


The great journals of the leading cities, subsidized 
by loans — presumably — teemed with editorials de- 
nouncing President Jackson and defending the course 
of the bank. 

Distress meetings at the same time and at the same 
points were held, fiery speeches were made, and 
strongly worded resolutions were adopted, requesting 
the President to append his signature to the bill renew- 
ing the charter of the bank. 

There was a singular identity in the editorials writ- 
ten, in the speeches delivered, and in the resolutions 
adopted, that gave evidence of a concerted action. 
This similarity of sentiments and language in the 
journals, speeches, and resolutions, evinced a most 
remarkable talent, for combining the various means 
of influencing President Jackson. 

But the hero of New Orleans was as immovable as 
the Rock of Gibralter. 

Andrew Jackson was in many respects the most 
remarkable man in American history. A sincere 
patriot of the purest integrit}'', with a clearness of 
mental vision that was unsurpassed, with a profound 
insight into the principles upon which our Government 
rested, he plainly saw that the interests of the bank 
were wholly at variance with that of American liberty. 

He well knew that to transfer to a private corpora- 
tion for its gain, the issuance and control of the cur- 
rency of the country, and to accumulate in its vaults 
the national revenues, would eventuate in building up 
a moneyed monopoly, ultimately controlling the press, 
the business interests, and the legislation of the nation. 

That point was now reached. 

He was utterly opposed to the Government abdicat- 


ing its highest sovereign function, — the issuance and 
control of the currency, — and delegating it to individ- 
uals or to corporations for their gain. 

He was conversant with the traitorous conduct of 
the bank during the war of 1812, and he concurred in 
the declaration of Jefferson that, *' Banks of issue were 
more dangerous to the liberties of the people than 
standing armies. ' ' 

In speaking of the firmness displayed by President 
Jackson against the arrogance of the bank, the distin- 
guished historian Bancroft says : — 

"When the period for addressing Congress drew 
near, it was still urged that to attack the bank would 
forfeit his popularity and secure his future defeat. 
The President replied, 'It is not for myself that I 
care. * It was urged that haste was unnecessary, as the 
bank had still six unexpired years of chartered exis- 
tence. 'I may die,* he replied, 'before another Con- 
gress comes together, and I could not rest quietly in 
my grave, if I failed to do what I hold so essential to 
the liberty of my country. ' ' ' 

Bancroft further says, that, upon one occasion when 
the bank conflict had reached its greatest height, 
the President and some of his friends were standing 
over the rocks of the Rip Raps, looking out upon 
the ocean, when the subject of chartering the bank 
was brought forward, whereupon the President re- 
marked, "Providence may change my determination; 
but man no more can do it than he can remove these 
Rip Raps, which have resisted the rolling ocean from 
the beginning of time." 

History fails to record a nobler sublimity of purpose 
than that displayed by President Jackson during the 
war of the bank upon the people. 


Notwithstanding the immense pressure brought to 
bear upon him, President Jackson, on the loth day of 
July, 1832, returned the bill to the Senate, whence it 
originated, accompanied with his veto message, which 
was a masterly exposition of his views upon the true 
principles of free Government, and it ranks in impor- 
tance with the Declaration of Independence. 

The first reason assigned by the President in his 
objections against the renewal of the charter of the 
bank was, that it created a monopoly under the author- 
ity of the general Government, and, therefore, it in- 
creased the value of its stock far above its par value, 
which operated as a gift of many millions to its stock 

The President laid down the fundamental principle, 
that a monopoly should only be granted when it 
returned a fair equivalent to the people. 

He showed that while its capital stock was fixed at 
$28,000,000, to confer this privilege upon the bank 
would add the enormous sum of $17,000,000 to the 
value of the stock, and for this immensely valuable 
franchise the Government would receive the pitiful 
sum of $200,000 per annum. 

The President advocated the sale of the stock to the 
highest bidder, and that the premium received there- 
from by the Government be paid into the national 
Treasury to lighten the burdens of taxation in lieu of 
its bestowal upon a few wealthy citizens. 

He stated that $8,000,000 of the stock of the present 
bank was held by foreigners, chiefly in England ; that 
this was the most dangerous feature of the plan ; that 
a majority of the shares of its stock might fall into 
those alien hands, and that in the event the United 


States would be involved in war with that nation, thus 
holding a large amount of the stock of this great bank 
monopoly, its influence would be thrown against the 
United States. 

The President says: — 

**A11 its operations within would be in aid of the 
hostile fleets and armies without. Controlling our 
currency, receiving our public moneys, and holding 
thousands of our citizens in dependence, it would be 
more formidable and dangerous than the naval and 
military power of the enemy. ' ' 

He produced figures demonstratmg the sectional 
character of the bank, that out of $35,000,000 of stock, 
$8,405,500 were held chiefly by Great Britain; only 
$140,200 were held by the nine great western states; 
$3,455,598 in the four southern states, and $13,522,000 
in the eastern and middle states. 

That in 1 83 1, the profits of the bank were $3,455, 598; 
of. this amount the western states contributed $1,640,- 
048; the four southern states $352,507, and the middle 
and eastern states $1,463,041. 

It will be ascertained that under the operations of 
this banking monopoly, the agricultural states of the 
West were paying heavy tribute to the East. 

It was further pointed out by the President, that the 
principle of taxation involved in the bill was radically 
wrong in this: that only the stock could be taxed 
where held. Therefore, while the nine western states 
paid $1,640,048 in profits to the bank, only $140,200 of 
its stock was held there subject to taxation; that, in 
the year 1831, the branch bank at Mobile earned 
dividends of $95,140, yet the state of Alabama could 
not tax the property of the bank, because not a single 
share of its stock was owned in its jurisdiction. 


The foreign stock holders could not be taxed a single 
penny on their holdings, as they were beyond the tax- 
ing power of the United States. The foreign stock 
holder would be drawing large dividends from the 
American people without bearing any of the burdens 
of government. This would tend to alien owner- 
ship of this bank, non-contribution to the burdens of 
Government creating this valuable privilege, and a 
continued drainage of specie to foreign nations. 

The fourth section of the proposed law provided : — 
"That the bills and notes of said corporation, although 
the same be, on the faces thereof, made payable at one 
place only, shall, nevertheless, be received by the said 
corporation at the bank or at any of the offices thereof, 
if tendered in liquidation or payment of any balance 
or balances due to said corporation, or to such office 
of discount and profit from any other incorporated 
bank. ' ' 

The right thus conferred upon state banks to pay 
their debts to the United States Bank, with the notes 
and bills of any branch bank thereof, would tend to 
unify the whole banking interest of the nation into a 
powerful combination, while at the same time, any 
individual who held currency issued by a branch of 
the United States Bank, situated at any other place 
than his residence, was deprived of that right, there- 
fore, he would be compelled to discount the bills of 
the branch bank, or transmit them to Philadelphia to 
obtain the cash for them. 

These were a few of the reasons assigned by the 
President in his famous veto message. 

It is now conceded by the most eminent historians 
of America, that General Jackson, in throttling the 
corrupt and unscrupulous money power of that day, 
saved the nation. 


On the 8th of January, 1815, General Jackson had 
met the veterans of Wellington at New Orleans, and 
inflicted upon them the most disastrous defeat ever 
suffered by England, and shed undying renown upon 
American arms. He saved America then, and he 
preserved its independence in 1832. 

By act of Congress, June 28, 1834, a change w^as 
made in the coinage laws of April 2, 1792. By the 
latter act, the legal ratio of silver to gold was fixed at 
fifteen to one, that is, fifteen pounds of pure silver 
were the legal equivalent of one pound of pure gold, 
and this ratio was maintained until the passage of the 
act of June 28, 1834. 

France and the other Latin States maintained a 
legal ratio of fifteen and one half to one. Conse- 
quently the United States over-valued silver when 
compared with gold. The bullion dealers, ever on the 
alert for a profit, sent the gold abroad and sold it at a 
premium. To remedy this, the act of June 28, 1834, 
reduced the quantity of gold in the gold eagle from 
247^ grains of pure gold to 232 grains, or a reduction 
in the ten dollar gold piece from 270 grains of standard 
gold to 258 grains. A corresponding reduction was 
made in the half-eagle and quarter-eagle. A fraction 
over six per cent, of gold bullion was therefore de- 
ducted from the gold coins. This made the legal ratio 
of silver to gold stand at sixteen to one. By this act, 
silver was under\^alued and gold made its appearance 
in circulation, and silver disappeared from the chan- 
nels of trade. 

The object of the passage of this law was to super- 
sede the United States Bank bills by the substitution 
of gold coin as a circulating medium. The people 


remembered the great efforts of the bank to monopo- 
lize the entire volume of money in the country, and 
gladly received the two and one half, five and ten dol- 
lar gold pieces in preference to bank notes. 

This substitution of gold coin for bank notes greatly 
diminished the profits of the bank, and it immediately 
declared war upon that coin. Its subsidized press, its 
minions and dependents denounced this species of 
money in terms of ridicule. The subservient tools of 
the bank, when offered gold coin in the ordinary tran- 
sactions of business, would shudder and recoil at its 
appearance, and demand United States bank notes as 
the superior money. 

In the meantime, however, in 1832, a presidential 
election was held. Henry Clay was put forward as 
the candidate of the Whigs and of the bank power. 
Andrew Jackson was the candidate of the Democratic 
party, and represented the principles of Jefferson. 
Jackson received two hundred nineteen electoral votes 
to forty-nine for Clay. The prophecies of those Dem- 
ocrats that Jackson had ruined the party by his contest 
with the bank were refuted by a decisive vote of the 


The next step taken by the President to curtail the 
power of the bank for mischief, was the removal of 
the government deposits amounting to many millions 
of dollars. 

After the bank so signally failed to obtain a renewal 
of its exclusive banking privileges, it did not deviate 
from its policy of inflicting distress and ruin upon the 


From the ist day of August, 1833, to the 30th of 
June, 1834, it continued its contraction of the currency 
by calling in its loans, giving as its reasons therefor, 
that the Government was harassing it on every hand. 
It had ample time in which to arrange its affairs with- 
out seriously crippling the business of the country and 
its excuse was not valid. 

Although many millions of public revenues were' 
under its sole charge, constituting a loanable fund for 
the benefit of the bank, its hireling press teemed with 
abuse against the administration of President Jackson. 

The President, in view of all the facts within his 
knowledge, entertained the opinion that the bank was 
insolvent, and an unsafe depository for the public 
moneys. He had previously communicated his belief 
to Congress as to the unsafe condition of the bank, but 
such was its influence in that body, that the House of 
Representatives, by a practically unanimous vote, 
declared its confidence in the institution. 

In the lawful exercise of his powers, the President 
ordered the Secretary of the Treasury, through the five 
government directors, to investigate its financial con- 
dition. The directors made a demand upon the bank 
for an inspection of its books, but they were denied 
access to them. In the face of the obstacles thrown 
in their way to ascertain its true condition, the direc- 
tors made an investigation with astonishing results. 

To obtain a full, true, and complete statement of the 
expenditures of the bank for political purposes, the 
official directors submitted a resolution to the full 
board of the bank, requesting the cashier to furnish a 
statement to the board, as early as possible, showing 
what amount was paid out for certain purposes, the 


sums of money paid to each person, the quantity and 
names of documents furnished by him, and his charges 
for the distribution of them. Similar statements were 
requested from the various branch offices of the bank. 
The resolution was voted down by the board of direc- 
tors, and a substitute was adopted expressing implicit 
confidence in the course of its president — Nicolas 

Subsequent events gave satisfactory explanation why 
the officials of the bank pursued that course in refusing 
an inspection of the books. Upon a report of the gov- 
ernment directors setting forth these facts, the Presi- 
dent assumed the responsibility of removing the public 
moneys from the bank, and distributed them among 
the various state banks. 

In this course he met decided opposition to this order 
in his cabinet. The Secretary of the Treasury, William 
J. Duane, peremptorily refused to obey the com- 
mand of his chief, and for this act of insubordination 
he was summarily removed from his office. 

Attorney General Taney was appointed to fill the 
vacancy occasioned by Duane 's removal, and the order 
was executed to the letter. 

The bold stand taken by the President in the removal 
of the deposits, stirred up the wrath of the bank party 

in Congress, and Henry Clay offered a resolution in 
the United States Senate as follows : — 

''Resolved, That the President in the late executive 
proceeding in relation to the public revenue, has 
assumed upon himself authority and power not con- 
ferred by the constitution and laws, but in dero2:-ation 
of both." 

This resolution censuring President Jackson was 
adopted by the Senate on the 28th of March, 1834. 


The bank pointed to this action of the senate as 
proof of its great power. 

On the 15th day of April, 1834, President Jackson 
transmitted a message to the Senate, respectfully pro- 
testing against this implied impeachment of his official 
acts. His communication to that body was a magnifi- 
cent exposition of constitutional law, and he severely 
arraigned the senate for passing judgment upon him 
without granting him an opportunity to be heard in 
his defense. 

Three years afterward the resolution of Clay was 
expunged from the journals of the senate. 

The President was fated to emerge triumphant from 
every contest with the banking power. 

The bank still continued its warfare upon the people. 
It avowed its purpose to precipitate a wide spread 
panic. It announced its intention to crush the busi- 
ness of the nation, unless the order of removal was 
recalled, and the deposits restored. The pressure 
brought to bear by the bank was directed at the chief 
commercial and industrial centers. The havoc wrought 
by it was as broad as the range of its operations, and 
its course was sustained by politicians as one of self- 

Public men who were deeply indebted to it openly 
upheld its conduct. One of these purchasable dem- 
agogues owed the bank the great sum of $100,000, and 
his defense of his owner was in direct proportion to his 
obligation to his master — the bank. One loan of 
$1,100,000 was made oy it to a broker in New York 
City, at which time it was steadily contracting the cur- 
rency at every point where it was represented by an 
office. The broker to whom this immense loan was 


made, accumulated a fortune by speculating with this 
money upon the misfortunes of others. 

Distress meetings were held everywhere under the 
auspices of the bank, resolutions were adopted, and 
memorials were presented to the President, requesting 
him to rescind his order of removal, but without avail. 

The presidents, vice-presidents, and various other 
officers of the so-called distress meetings were selected 
from those who had supported Jackson for the presi- 
dency, which fact was always announced to the people. 
The petitions, memorials, and remonstrances presented 
to the President but served to strengthen his deter- 
mination to crush the bank, and the last fangs of the 
oppressors were pulled by the removal of these 
deposits amounting to $40,000,000. 

It must be borne in mind, that during the adminis- 
tration of Jackson, a controversy arose between the 
United States and France with reference to the depre- 
dations committed upon our merchant marine by the 
latter nation during the Directory. A treaty had been 
concluded by the administration with the kingdom of 
France on the 4th of July, 183 1, by the provisions of 
which, the latter power agreed to pay the United States 
the sum of $5,000,000,. as indemnity for such depreda- 

The French authorities failed to pay the first install- 
ment thereof, and the Secretary of the Treasury, under 
the direction of the President, drew a bill of exchange 
upon France for the amount. The bill was transmit- 
ted to Paris through the United States Bank as the fiscal 
agent of the Government. The authorities of France 
refused to honor the bill, and it was protested, where- 
upon the bank seized upon the Government funds in its 


possession to the amount of $170,040 which it claimed 
as damages for the protestation of the bill. This high 
handed procedure was clearly illegal on the part of 
the bank, and violative of the Constitution which pro- 
vides that no money shall be drawn from the treasury, 
except through appropriations made by Congress. 

To force a suspension of specie payments by state 
banks of issue, it drew immense bills of exchange on 
Paris, where it had no money, for the payment of 
them, then drew vast sums of specie out of the banks 
of New York City, and transmitted it to Paris to meet 
the bills so drawn by it. 

In speaking of the course of the bank, in attempting 
to force a suspension of specie payments by the state 
banks of issue, Mr. Royall says : — 

"It was certainly not too good to do so, and in the 
year 1841, just before it finally expired, it is proved to 
have attempted to create a general suspension, by 
forcing the banks of the city of New York to suspend. 
The manner of this attempt was afterward related by 
its cashier. It consisted in selling bills in unlimited 
quantities on Paris — at this time in great demand — 
where it had not a cent to meet them, and drawing the 
coin with the proceeds of these sales out of the New 
York banks and shipping it abroad to meet these bills 
as they made their appearance there. The bills, how- 
ever, got to Paris before the coin, came back protested, 
and the great bubble was finally pricked. ' ' 

This act was committed by the bank to embarrass 
the government, to emphasize the panic then begin- 
ning to rage, and to bankrupt the business interests of 
the nation. 

In short, no trick, device, or artifice was too villain- 
ous or traitorous for the bank to injure the credit of the 
Government and the happiness of the people. 


The bank again failed to obtain a charter in 1841. 

The rottenness of the bank then became known, and 
a complete investigation into its management from 
1830 to 1836, instituted by the stockholders, developed 
an astonishing degree of villainy, corruption, and ras- 
cality that was appalling, and the results of which 
more than sustained the charges brought against it by 
President Jackson and his supporters. 

It was discovered that hundreds of thousands of dol- 
lars were expended by President Biddle in influencing 
elections, subsidizing the press, and bribing members 
of Congress. 

The stockholders, on the completion of this investi- 
gation, instituted a suit against President Biddle in 
the United States circuit court at Philadelphia, for the 
sum of |i, 01 8, 000 expended b}^ him for which no 
vouchers could be found. 

It was further demonstrated that, from 1830 to 1836, 
during the struggle of the bank for a new lease of cor- 
porate life, loans, aggregating more than $30,000,000, 
were made by its president to members of Congress, 
editors of newspapers, politicians of all grades, jobbers 
and brokers, mostly without security. 

Perhaps all the facts connected with its management 
were never made known, on the ground of public pol- 
icy, as the reputations of many eminent men, not 
excepting presidential candidates, would have been 
utterly ruined. 

In speaking of the contest between the bank and 
President Jackson, Parton, the biographer, says : — 

''In these Jacksonian contests, therefore, we find 
nearly all the talent, nearly all the learning, nearly all 
the ancient wealth, nearly all the business activity. 


nearly all the book-nourished intelligence, neariy all 
the silver-forked civilization of the country, united in 
opposition to General Jackson, who represented the 
country's untutored instincts." 

Parton further says that Jackson was called a mur- 
derer, a traitor, an ignoramus, a fool, a crook-back, a 
pretender, and various other vile names. 

Nicolas Biddle, who, to a very large extent, was 
responsible for the gigantic conspiracies, bank-panics 
with their resultant ruin and misery, was driven in 
disgrace from his exalted position, and he died a 
shameful death almost unknown, unhonored, and 

The man before whom bowed in fawning adulation, 
great and wise statesmen, merchant princes, editors of 
powerful journals, and leaders of public opinion ; he, 
who, in the magnitude of his financial plans and 
undertakings, rivaled the money kings of Europe ; he, 
who arrayed dollars against the immutable principles 
of justice and the rights of man, lived to see his name 
become a by- word, a hissing, and a reproach. 

The career of the United States Bank and its presi- 
dent is an awful monument of warning on the highway 
of time to come, an object lesson to that colossal greed 
of power, which, to tighten its grip upon the people, 
scatters distress and ruin in its train, and which, from 
its ramparts of ill-gotten wealth obtained by monopoly 
and special privileges, defies the I4ws of ma^ and the 
laws of God. 

On the other hand, the fame of Jackson shines more 
and more with the lapse of time. 

Thomas Jefferson, the founder of American Democ- 
racy, and the friend of the human race, is honored as 


the great constructive statesman of America; Andrew 
Jackson is revered as that great leader who regener- 
ated the politics of his country, and rescued a people 
from financial slavery. During his administration, 
the public debt was wholly paid, a large surplus of 
public revenues accumulated to the credit of the 
United States, the money power was dethroned, the 
American nation was honored everywhere, and he 
retired from the presidency amid the plaudits of his 

In his farewell address to the people, March 3, 1837, 
he solemnly warned them against the money power, 
that special privileges must not be granted to any 
class of citizens, and that justice must be the basis of 
public and private conduct. 

In this noble document, the President admonishes 
the people to be on their guard against the money 
power. He says: — 

"But when the charter for the bank of the United 
States was obtained from Congress, it perfected the 
paper system, and gave to its advocates the position 
they have struggled to obtain from the commence- 
ment of the Federal Government down to the pres- 
ent hour. The immense capital and peculiar priv- 
ileges bestowed upon it, enabled it to exercise despotic 
sway over the other banks in every part of the 
country. From its superior strength it could seriously 
injure, if not destroy, the business of any one of them 
that would incur its resentment ; and it openly claimed 
for itself the power of regulating the currency through- 
out the United States. In other words, it asserted 
(and undoubtedly possessed) the power to make money 
plenty or scarce, at its pleasure, at any time, and in 
any quarter of the Union, by controlling the issues of 
other banks, and in permitting an expansion, or com- 


pelling a general contraction of the circulating medium 
according to its own will. 

**The other banking institutions were sensible of its 
strength, and they soon became generally its obedient 
instruments, ready at all times to execute its man- 
dates ; and with the other banks necessarily went also 
that numerous class of persons in our commercial 
cities who depend altogether on bank credits for their 
solvency and means of business, and who are therefore 
obliged, for their safety, to propitiate the favor of the 
money power by distinguished zeal and devotion in 
its service. The result of the ill-advised legislation 
which established this great monopoly, was to concen- 
trate the whole moneyed power of the Union, with its 
boundless means of corruption, and its numerous 
dependents, under the direction and command of one 
acknowledged head; thus organizing this particular 
interest as one body, and securing to it unity of action 
throughout the United States, and enabling it to bring 
forward, upon any occasion, its entire and undivided 
strength to support or defeat any measure of the gov- 
ernment. In the hands of this formidable power, thus 
perfectly organized, was also placed unlimited domin- 
ion over the amount of circulating medium, giving it 
the power to regulate the value of property, and the 
fruits of labor in every quarter of the Union ; and to 
bestow prosperity, or bring ruin upon any city or sec- 
tion of the country as might best comport with its own 
interests or policy. 

"We are not left to conjecture how the moneyed 
power, thus organized, and with such a weapon in its 
hands, would be likely to use it. The distress and 
alarm which pervaded and agitated the whole country, 
when the Bank of the United States waged war upon 
the people in order to compel them to submit to their 
demands, cannot yet be forgotten. The ruthless and 
unsparing temper with which whole cities and com- 
munities were oppressed, individuals impoverished and 
ruined, a scene of cheerful prosperity suddenly 
changed into one of gloom and despondency, ought to 


be indelibly impressed on the memory of the people of 
the United States. If such was its power in a time of 
peace, what would it not have been in a season of war, 
with an enemy at your doors. No nation but the free- 
man of the United States could have come out victori- 
ous from such contest ; yet, if you had not conquered, 
the Government would have passed from the hands of 
the many to the hands of the few ; and this organized 
money power, from its secret conclave, would have 
dictated the choice of your highest officers, and com- 
pelled you to make peace or war, as best suited their 
own wishes. The form of your Government might for 
a time have remained, but its living spirit would have 
departed from it. ' ' 

The wise counsel couched in these golden words of 
President Jackson are now more applicable than when 
uttered by him. 

In the election of 1836, Martin Van Buren succeeded 
Jackson in the presidency. The panic engineered by 
the bank enveloped the people, and the whole system 
of credit built up by it fell with a crash. In fact the 
bank had so shrewdly manipulated the volume of 
money, and so absolute was its control over it, that 
society had resolved itself into two classes, a creditor 
class, small in numbers, but powerful in influence ; a 
debtor class, constituting a great majority of the peo- 
ple, but helpless in the grasp of the creditor class. 

One was the master, the other the servant. 

During the administration of Van Buren, the Inde- 
pendent Treasury Bill became a law. 

Thus the work begun by Jackson in crushing the 
bank, was consummated by the separation of the pub- 
lic moneys from those of the banks — a most salutary 



"She is not dead, but holding her capital and stock 
holders together under a state charter, she has taken 
a position to watch events and also to profit by them. 
The Royal tiger has gone into the jungle; and, crouch- 
ing on his belly, he awaits the favorable moment of 
emerging from his covert and springing on the body 
of the unsuspicious traveler." — Thomas H. Benton. 

*' Bank paper must be suppressed and the circulation 
restored to the nation to whom it belongs. 

"The power to issue money should be taken from 
the banks and restored to congress and the people. 

" I sincerely believe that banking establishments are 
more dangerous than standing armies. 

" I am not among those who fear the people. They, 
and not the rich, are our dependence for continued 
freedom. And to preserve their independence, we 
must not let our rulers load us with perpetual debt. 

"Put down the banks and if this country could not 
be carried through the longest war against her most 
powerful enemy without ever knowing the want of a 
dollar, without dependence upon the traitorous class of 
her citizens, without bearing hard upon the resources 
of the people or loading the public with an indefinite 
burden of debt, I know nothing of my countrymen. ' ' 
— Thomas Jefl^erson. 

In the preceding chapter, the career of the United 
States Bank was traced from its origin to its downfall. 

It was there shown that the United States, by trans- 
ferring its sovereign power of issuing currency to cir- 
culate as money among the people, and delegating it 



to a private corporation, had, in a period of less than 
fifty years, built up a monopoly that threatened to pull 
down the pillars of the republic. 

That the panics of 1811, 1833, and 1837-41, with 
their consequent ruin of tens of thousands of indus- 
tries, with the attendant circumstances of hunger, 
suffering, and starvation, were designedly produced by 
the bank to overawe Congress and the President. 

That it secured the powerful political influence of 
Webster, Clay, and Calhoun on the floor of the United 
States senate as the champions of its interests. 

That the press of the country, to a very large extent, 
succumbed to its moneyed influence. 

That it attempted to crush the beneficient adminis- 
tration of President Jackson. 

We now come to consider a system of national bank- 
ing, compared with which, the old United States Bank 
was a pigmy. 

In 1 86 1, when the Southern states attempted to 
withdraw from the Union, the result was that great 
conflict known in history as the civil war. Through- 
out its progress, the mass of the people were intently 
engaged with the gigantic operations constantly car- 
ried on during that period, and, therefore, little atten- 
tion was paid by them to the financial legislation, 
enacted by Congress. 

When the North and the South were marshaling 
their respective armies to determine the question of 
military supremacy, the weight of foreign influence 
was thrown to the southern cause. Great Britain, 
from her antipathy to the people of the United States, 
early recognized the Confederacy, and her course was 
followed by France and Spain, but the latter powers 
did not resort to the extreme measures of England. 


During the early period of the war, immense sums of 
money were needed by the Federal Government to 
arm, equip, and maintain her numerous armies and 
fleets necessary for the suppression of the rebellion. 

.Heavy taxes of various kinds were levied and col- 
lected for the payment of the extraordinary expenses 
incurred by the war, but this was insufficient to meet 
the expenditures. Resort was had to borrowing 
money on the credit of the United States by the sale 
of bonds. 

At that time as at present, New York City was 
the financial center of the country. August Belmont 
& Co. were the American agents of the Rothchilds, 
and the former advised this great banking house that 
there would be much risk in purchasing American 

The Rothchilds were located in the city of London, 
England, with branch banks at Paris, Frankfort, Ber- 
lin, and Vienna. 

From the year 1800, up to the outbreak of the civil 
war, the United States had made astonishing progress 
as a commercial nation, our commerce had rapidly 
grown to be the second largest in the world, and it 
promised, ere long, to surpass that of Great Britain, 
who had long looked with jealous eye on the remark- 
able growth of the American merchant marine; She 
had for centuries prided herself as the "Mistress of 
the Seas, ' ' and had long feared that this republic would 
snatch its supremacy from her, and thus relegate her 
to a second rate power. 

Hence, upon the outbreak of the war, the rejoicing 
in England was immense, and British statesmen pre- 
dicted the success of the Confederacy. Nor was this 


all. England aided the South by money, munitions 
of war, by the recognition of her belligerency, and by 
her moral support. 

It was evident that no money could be secured from 
England by the United States to maintain the suprem- 
acy of the Constitution, for nations, like men, are gov- 
erned in their money transactions largely by their likes 
and dislikes. 

In 1 86 1, the money in circulation in the United States 
consisted of gold and silver coins, and state bank cur- 
rency. As the expenses of the Government in 1861-62 
were many millions of dollars in excess of its income, 
and as but little money could be had by the sale of its 
bonds, recourse was had to issuing paper money. 

By the acts of July 17th, and August 5, 1861, the 
Secretary of the Treasury was authorized to issue 
demand notes to the amount of fifty millions of dol- 
lars, and these notes were made full legal tender for 
all debts and demands, both public and private. This 
was not the first time that the Federal Government had 
issued its notes to circulate as money. It will be re- 
membered that during the war of 181 2, the Govern- 
ment had resorted to this means, a precedent followed 
by the administrations of Van Buren, Polk, and 

These notes so issued at these various times were 
maintained at a parity with gold and silver coin, and 
were a favorite money of the people. History records 
the fact that no less than twenty issues of paper 
money were emitted by the general Government prior 
to the year 1862; that the people never questioned its 
value and efficiency as a medium of exchange. These 
various issues of currency were uniformly receivable 


by the Government in payment of its taxes and 

During the perilous times of the nation, when bank- 
ers and financiers refused to loan money to it, the issue 
of full legal tender paper money never failed to come 
to the rescue, while cowardly gold fled to the rear. 

Therefore, the fifty millions of demand notes issued 
under the authority of the acts of July 17th and August 
5, 1 86 1, having unlimited legal tender power for the 
payment of all demands, never depreciated a farthing. 

Subsequent to the passage of this act, a bill was 
introduced in Congress providing for the issue of non- 
interest bearing treasury notes to the amount of 
$150,000,000 with full legal tender power for the pay- 
ment of all debts and demands, public and private. 
Immediately, from the leading cities of the country, a 
horde of bankers, or as Hon. Thaddeus Stevens aptly 
termed them, "A delegation of bankers and coin ven- 
ders," hastened to Washington, organized themselves, 
and requested the Committee on Ways and Means of 
the House, and the Finance Committee of the Senate to 
meet with them at the office of the Secretary of the 
Treasury. Their request was complied with on the 
nth day of February, 1862. 

Owing to some peculiar and powerful influence, then 
and there exerted by these organized bankers on these 
committees, the legal tender clause was modified to 
read as follows: — 

'*That the amount of the two kinds of notes together 
shall at no time exceed the sum of $150,000,000, and 
such notes herein authorized shall be receivable in pay- 
ment of taxes, internal duties, excises, debts, and 
demand of every kind due to the United States, ex- 
cept duties on imports, and of all claims and demands 


against the United States of every kind whatsoever, 
except for interest upon bonds and notes which shall 
be paid in coin, and shall also be lawful money and a 
legal tender in the payment of all debts, public and 
private, within the United States, except duties on 
imports and interest as aforesaid. ' ' 

This proposed amendment was severely criticised by 
Mr. Stevens, of Pennsylvania, and by Mr. Spaulding, 
of New York. During the debate upon the bill as 
amended, Mr. Stevens denounced the demands of the 
bankers and said : — 

"A doleful sound came up from the caverns of the 
bullion brokers and the saloons of the associated banks. 
Their cashiers and agents were soon on the ground, 
and persuaded the Senate with but little deliberation 
to mangle and destroy what it had cost the House 
months to digest, consider and pass. 

"Instead of being a beneficent and invigorating 
measure, it is now positively mischievous. It has all 
the bad qualities which its enemies charged on the 
original bill and none of its benefits. It now creates 
money and by its very terms declares it a depreciated 
currency. It make two classes of money — one for 
banks and brokers and another for the people. It dis- 
criminates between the rights of different classes of 
creditors ; allowing the rich capitalist to demand gold 
and compelling the ordinary lender of money on indi- 
vidual security to receive notes which the Government 
had purposely discredited." 

Mr. Stevens further said : — 

"Who is this favored class? The bankers and brok- 
ers and nobody else. But how is this gold to be raised? 
The duties and public lands are to be paid for in 
United States notes, and they or bonds are to be put 
up at auction, to get coin for these very brokers, who 
would furnish the coin to pay themselves by getting 
twenty per cent, discount on the notes thus bought." 


While on his death bed, the Great Commoner, as 
his friends loved to call him, recalled the action of 
Congress in demonetizing the greenback at the insti- 
gation of the banks. 

In speaking of the bankers he said : — 

''We were foolish to grant them gold interest, and 
now they unblushingly demand further advantages. 
The truth is we can never satisfy their appetite for 

The amendment of Mr. Stevens to place officers and 
soldiers of the army and navy, and those who should 
furnish them with provisions upon the same standing 
as the bankers and brokers, was defeated by a vote of 
72 to 67. 

In denouncing the amendment striking out the 
legal tender clause, Senator John Sherman spoke as 
follows : — 

"If you strike out this legal tender clause you do it 
with the knowledge that these notes will fall dead 
upon the money market of the world ; that they will 
be refused by the banks ; that they will be a disgraced 
currency that will not pass from hand to hand; that 
they will have no legal sanction ; that any man may 
decline to receive them, and thus discredit the obliga- 
tions of the Government. I ask again if that is just to 
the men to whom you have contracted to pay debts? 
When you issue demand notes and announce your pur- 
pose not to pay any more gold and silver coin, you ten- 
der to those who have furnished provisions and serv- 
ices this paper money. What can they do? They can 
not pay their debts with it, they can not support their 
families with it, without a depreciation." 

He further said in this speech of February 13, 1862, 
that "I much prefer the credit of the United States, 
based as it is upon all the productions and property of 


the United States, to the issues of any corporation, 
however guarded and managed." 

This language of Senator Sherman was that of 
undoubted patriotism, and it is strongly condemnatory 
of his subsequent public career, during which he 
became the active ally of the national banks. 

Mr. Kellogg, of Illinois, thus scored the greed of 
these men. He said : — 

"I am pained to sit in my place in the House and 
hear members talk about 'the sacredness of capital,' 
that the interests of money must not be touched. Yes, 
sir, they will vote six hundred thousand of the flower of 
the American youth for the army to be sacrificed with- 
out a blush, but the great interests of capital, of 
currency, must not be touched. ' ' 

In referring to the grand struggle made by Mr, Ste- 
vens for full legal tender currency, Judge Kelley 
said : — 

"I remember the grand old Commoner with his 
hat in his hand and his cane under his arm, when he 
returned to the House from the final conference, shed- 
ding bitter tears over the result. 'Yes,' said he, 'we 
have had to yield. The Senate was stubborn. We did 
not yield until we found that the country must be lost 
or the banks be gratified; and we have sought to save 
the country in spite of the cupidity of its wealth- 
iest citizens. * " 

The bankers thus succeeded in limiting the legal ten- 
der power of the Treasury note, or as it is commonly 
called, the greenback, and from this time on the bank- 
ers, brokers, and speculators have, with few exceptions, 
dictated the financial legislation in the United States. 

This amendment, by which the debt paying power 
of the Treasury note was restricted within such narrow 
limits, was a most dishonest act on the part of the 


It drew distinctions between the various kinds of 
money issued by the United States. It made the 
bankers and bond holders a privileged class, and it 
inflicted a wound upon the nation from which it has 
not yet recovered. It made gold and silver coin the 
money of the privileged classes, who composed that 
traitorous element so justly denounced by Jefferson. 

By force of this amendment, coin went to a premium, 
thereby greatly enhancing the wealth of the bankers 
and bullion brokers. 

Moreover, the principle involved in that act greatly 
weakened the most powerful element of sovereignty 
that can reside in a nation, by placing the control of 
the value of money in the hands of organized greed, 
in this case the gold gamblers of Wall street. 

It laid the foundation of a stupendous public debt, 
which the holders thereof would strive to perpetuate 
by every means in their power, and it was the first step 
to fasten on the people the most powerful and merci- 
less tyranny that ever cursed a free people — the cen- 
tralized money power known as the national banking 

The bill, as amended, became a law on July ii, 
1862, and, from that time, began the depreciation of 
the greenback currency. 

The banking power, which had succeeded in induc- 
ing Congress and the President to cripple that cur- 
rency, which eventually saved the Union, afterward 
pointed the finger of scorn at this money as a debased 
currency, and they, therefore, impliedly damned their 
own nefarious conduct by denouncing it as "rag-baby" 

As a result of this act as amended, the merchant who 


paid duties on merchandise imported from abroad was 
compelled to pay the taxes levied thereon, in coin. 
To obtain that kind of money he must proceed to the 
bullion broker, and pay him a large premium for the 
coin to make his payment of the customs levied on his 
merchandise. The bond holder was paid his interest 
on government bonds in gold, which was afterward sold 
by him to the importer, at a high premium. 

This legislation was the result toward which the bull- 
ion brokers and gold gamblers of Wall street bent all 
their energies to procure, when they induced the gov- 
ernment to rob the greenback of its full legal tender 
debt-paying power. It was the consummation of the 
most dishonest financial scheme ever perpetrated upon 
a heavily taxed and patriotic people. 

Immediately following the visit of these bankers to 
Washington, a circular was issued by the London 
bankers, and distributed by one Hazard, who was 
their representative in this country at that time. 

The contents of this famous circular are as follows : — 

"Slavery is likely to be abolished by the war power 
and chattel slavery destroyed. This I and my Euro- 
pean friends are in favor of; for slavery is but the own- 
ing of labor and carries with it the care of the laborer, 
while the European plan, led on by England, is capital 
control of labor by controlling wages. This can be 
done by controlling the money. The debt, that cap- 
italists will see is to be made out of the war, must be 
used as a measure to control the volume of money. 
To accomplish this the bonds must be used as a bank- 
ing basis. We are now waiting for the Secretary of 
the Treasury to make his recommendation to Congress. 
It will not do to allow the greenback (as it is called) to 
circulate as money any length of time, for we cannot 
control it. " 


The existence of/ this remarkable circular has been 
strenuously denied time and again by the national 
banking- money power. Notwithstanding these deni- 
als, the line of action indicated in that circular has 
been consistently pursued from that day to this. 

The advice of said Hazard was at once acted upon 
by the organized banks, and they proceeded to make 
known their demands to Congress. 

Therefore, a bill was speedily brought forward by 
Senator Sherman in the United States Senate, provid- 
ing for the incorporation and organization of the pres- 
ent system of national banks as banks of issue — a bill 
whose passage meant the creation of moneyed institu- 
tions, whose interests would be, or could be made, 
antagonistic to the nation. 

Is it not exceedingly strange, that Senator Sherman, 
who, in his able speech of February 13, 1862, advanced 
powerful arguments in behalf of Government legal 
tender currency, or greenbacks, in which he stated 
that he preferred the credit of the United States, 
based, as it was, upon all the productions and property 
of the people, to the issue of any corporation however 
well guarded and managed, would thus suddenly 
change his position? 

In less than a year from the time he so ably defended 
legal tender greenback currency, he reversed his posi- 
tion, and fathered a financial measure which brought 
into being a dangerous rival to the Government when 
it was engaged in a death struggle. 

In substance, this act provided for the incorporation 
of banking companies, by which not less than five per- 
sons could, under certain restrictions, organize a bank, 
by depositing with the Secretary of the Treasury 


United States bonds to secure the circulation of 
national bank notes as currency. 

The capitalists thus organizing themselves into a 
national bank association, were required to enter into 
articles of association which should specify, in general 
terms, the object for which the association was formed. 
These articles were to be signed by the persons unit- 
ing to form the association, and a copy of them was to 
be forwarded to the Comptroller of the Currency to be 
filed and preserved in his office. 

No association could be organized as a national bank 
with a less capital than one hundred thousand dollars ; 
except that banks with a capital of not less than fifty 
thousand dollars could, with the approval of the Secre- 
tary of the Treasury, be organized in any place having 
a population not exceeding six thousand inhabitants. 

Upon a deposit of United States bonds, the banking 
associations were entitled to receive from the Comp- 
troller of the Currency, circulating notes, of different 
denominations, in blank, registered or countersigned, 
equal in amount to ninety per centum of the amount 
of the current market value of the bonds so deposited 
by the association with the Comptroller, but in any case 
the circulating notes were not to exceed ninety per 
centum of the par value of the said bonds, if bearing 
interest at a rate of not less than five per cent, per 
annum; and the amount of circulating notes to be 
furnished to each association shall be in proportion to 
its paid-up capital as follows, and no more : — 

1. To each association whose capital does not exceed 
five hundred thousand dollars, ninety per centum of 
such capital. 

2. To each association whose capital exceeds five 


hundred thousand, but not exceed one million of dol- 
lars, eighty per centum of such capital. 

3. To each association whor,e capital exceeds one 
million of dollars, but not exceed three millions of 
dollars, seventy-five per centum of such capital. 

4. To each association whose capital exceeds three 
millions of dollars, sixty per centum of such capital. 

The law further provided that after any association 
receiving circulating notes under this act, and has 
caused its promise to pay such notes on demand to be 
signed by the president, or vice-president, and cashier 
thereof in such manner as to make them obligatory 
promissory notes, payable on demand, at its place of 
business, such association may issue and circulate the 
same as money. And such notes shall be received at 
par in all parts of the United States in payment of 
taxes, excises, public lands, and all other dues to the 
United States, except duties on imports, and also for 
all salaries and other debts and demands owing by the 
United States to individuals, corporations, and associa- 
tions within the United States, except interest on the 
public debt, and in redemption of the national cur- 

This act also provided that, in lieu of all existing 
taxes, each association should pay a duty of one per 
cent, per annum upon the average amount of its notes 
in circulation, and one-half of one per cent, per annum 
upon the average amount of its deposits, and a duty 
of one-half of one per cent, per annum on the average 
amount of its capital stock beyond the amount invested 
in United States bonds. 

Furthermore, these national banking associations 
were authorized to institute suits at law in the United 
States courts as courts of orginial jurisdiction. 


This provision gave the national banks an advantage 
over the ordinary citizen, and placed these associations 
beyond the jurisdiction of the State courts ; in other 
words, these banks could select whatever court their 
interest dictated. 

It will at once be ascertained, from a study of the 
national banking law, that the capital of the associa- 
tions was nearly doubled by act of Congress. 

In the first place, bonds, deposited by them to secure 
their circulation drew interest payable in gold, at this 
time at a high premium. Second, the circulating notes 
issued to them by the United States, although promis- 
sory notes payable on demand and therefore debts of 
the banks, were nominally money, and were loaned 
out at a high rate of interest to the customers of the 
national banks. 

The United States Government gave the wealthiest 
men of the country, in the time of its greatest peril 
and distress, a gratuity equal to ninety per centum of 
their banking capital. 

This scheme engineered through Congress by the 
money power, greatly tended to centralize the currency 
in the large cities, and, therefore, made it master of 
the productive energies of the American people, as the 
vast majority of the bonds were held in New York 
City and other centers of wealth and population. 

It made the circulating notes of these banks a rival 
to the greenback currency, and it would be to the 
interest of the national bankers, by every means in 
their power, to drive out and destroy the paper money 
issued by the Government. 

This law placed it in the hands of the money power 
to contract or expand the vokime of money at its pleas- 


ure, and, therefore, enhance or depreciate the value of 
stocks, bonds, and all other forms of property in the 
United States. 

The far-reaching influence of this act of Congress, 
chartering national banks, becomes apparent, when the 
true principles and functions of Government are con- 
sidered in all their relations to the people. 

Pre-eminent among the various powers conferred 
upon, or assumed by a sovereign state, are those of 
taxation, of raising armies, and of coining, issuing, and 
controlling the volume of money. 

The first named power, that of taxation, is only 
limited by the necessities of the State, and of the amount 
of property upon which it operates. 

A citizen of a state may become the owner of a home 
through arduous toil and life-long rigid economy, yet, 
the state, when invoking the power of levying and col- 
lecting taxes, may sweep away this property, not 
leaving a vestige for the man whose labor and priva- 
tions created a shelter for himself and family. 

In a great case before the highest tribunal of the 
nation. Justice Samuel F. Miller said that '*The power 
of taxation is the power to destroy." 

No man who is endowed with a modicum of intel- 
ligence would advocate a transfer of this immense 
power to a private corporation for its gain. 

It would amount to the self-destruction of a nation. 

The power of raising and maintaining armies is in- 
herent in a sovereign state, and is absolutely necessary 
for its self-defense, and therefore its self-preservation. 

The strong arm of the Government can reach every 
fireside in the land, and can drag from thence the 
father, husband, or son, tear him away from the family 


circle, force him to don the national uniform, to bear 
arms, and to lay down his life for his country. 

No citizen can resist the imperative call of his coun- 
try when involved in war. 

No sane man would advocate the delegation of this 
high attribute of sovereignty to a corporation for its 
individual gain, as such transfer of power would inevi- 
tably result in frightful oppression. 

The power of coining, issuing, and controlling the 
volume of money is a far more important function of 
government than the foregoing. 

All commerce, exchange, the existence of Govern- 
ment, of civilization itself, hinges upon this mighty 
function of Government. The power of issuing and 
controlling money exercises an imperial sway over all 
productive industry as universal as the law of gravita- 
tion upon all matter. 

The value of all property, whether of the present 
time, or of that resulting from the earnings and ac- 
cumulations of all past generations, depends upon the 
control of the volume of money. 

The power of levying and collecting taxes for the 
support of the nation, of raising and maintaining armies 
for its preservation, is dependent upon the control of 
the currency. 

The former is subordinate to the last named power, 
and consequently involves the very life of the nation. 

Yet, in time of the greatest need of the nation, 
when everything most valuable to man was at stake, 
this necessary power of Government was delegated to 
the most traitorous and rapacious system of corpora- 
tions that ever cursed the people. 

By this transfer of sovereign power to the national 


banking system, the Federal Government divested 
itself of that never failing resource which secured the 
independence of the colonies, and which successfully 
enabled the administration of James Madison to chas- 
tise the overweening pride of Great Britain in 1812. 

The alienation of this highest function of the nation 
to the national banking money power was a high crime 
against the welfare of the country, and it created 
a powerful moneyed interest antagonistic to the 
United States. 

More than one hundred years ago, the illustrious 
Jefferson clearly pointed out the dangers of banks of 
issue. Time and again, he exerted his voice, his pen, 
and his influence, in warning the people of the conse- 
quences that would inevitabl}^ flow from such selfish 
schemes as the transfer of national powers to corpora- 

The extreme danger of a sovereign power, in trans- 
ferring its absolute right of coining and issuing money 
in whole, or in part, to a private individual, or corpo- 
ration, has been clearly pointed out by the ablest think- 
ers of all ages. vSuch transfers of the powers of a state 
have universally resulted in extortion and oppression 
by those to whom this privilege is granted. 

Vattel, the great authority on the law of nations, 
instances several cases. He places the right of coining 
money among the prerogatives of majesty, and he 
relates that Sigismund, king of Poland, having granted 
this privilege to his vassal, the Duke of Prussia, in the 
year 1543, the Estates of that country passed a decree 
in which it was asserted that the king could not grant 
that privilege, it being inseparable from the crown. 

The kings of France granted the privileges of coin- 


ing money to lords and bishops, and these grantees 
having used that power as an instrument of great op- 
pression, these privileges were cancelled by the crown 
on account of the great abuses practiced on its subjects. 

The history of England furnishes a notable example, 
for in 1723, one Wood, an Englishman, obtained a 
royal patent for the coinage of copper half-pence. 
Wood at once proceeded to flood Ireland with this base 
coin, and robbed the down-trodden people of that 
country out of thousands of pounds sterling. 

This gross outrage upon that nation aroused the 
indignation of Swift, and in his "Drapier's Letters" 
he attacked the Government with such bitter satire, 
that, in 1725, the patent to Wood was withdrawn. 

Parliament, however, granted the scoundrelly Wood 
an annuity of fifteen thousand dollars per annum for 
the period of twelve years as an indemnity! The 
presumption is, that this great sum of money was given 
to Wood on the ground that he had surrendered a 
'Vested right." 

Our Government, in the enactment of this national 
banking law, gave away its greatest resource in time 
of peace or war ; viz. , the power to issue legal tender 
paper money, a resource that had time and again come 
to the rescue of the people while the capitalists held 

The principal excuse offered by those who procured 
the passage of this law was, that it would create a 
market for bonds, and would aid in the maintainance of 
the public credit ; that, for the consideration of receiving 
these circulating notes to loan out at interest as money, 
the bankers, who were the beneficiaries of this law, 
would lend their assistance to the Government by aid- 
ing it to maintain a high price for its obligations. 


The very reason advanced by the originators of that 
system of banking and currency for its creation, be- 
came the strongest reason why the Government credit 
sunk to its lowest point, because, the national bank- 
ers, to obtain these bonds as low as possible, would 
combine to depress the market value of the United 
States bonds which formed the basis of bank currency. 

In fact, the market price of Government bonds rap- 
idly fell to the lowest mark ever known, after the pas- 
sage of this act, and the national banking money power 
consequently reaped a harvest reaching into scores of 

The same power depreciated the value of greenbacks 
for the avowed purpose of increasing the premium on 

Not satisfied with the immense advantages thus 
obtained from the Government, during the most critical 
period of the war, the money power, on the 17 th day 
of March, 1864, succeeded in securing the passage of a 
resolution through Congress, authorizing the Secretary 
of the Treasury to pay the interest upon bonds, in ad- 
vance, not exceeding one year, either with or without 
rebate for such prepayment, according to his discretion. 

The bond holders and bankers were thus enabled to 
draw their interest in gold one year in advance, dis- 
pose of it at a high premium to the government and 
to those who paid duties on imported merchandise. 

In July, 1864, gold rose to a premium of $2.85, and 
the bond holder, national banker, and gold gambler 
fleeced the people out of millions ; while the soldier, 
who was sacrificing his life for his country, was paid 
in greenbacks purposely depreciated by the govern- 
ment for whose existence he fought. 


During the Forty-fifth Congress, Hon. James B. 
Weaver introduced the following resolution in the 
House of Representatives: — 

"Resolved, That the Secretary of the Treasury be 
and is hereby directed to report to this house whether 
he has at any time anticipated the payment of interest 
on the public debt ; if so, how much has been paid in 
advance, and to whom. ' ' 

This resolution was referred to the Committee on 
Ways and Means, and the chairman thereof sent the 
resolution to the Secretary of the Treasury, Sherman, 
with a request to state when he could report. 

The Secretary, in reply, stated: — 

*'That there was no public document that would give 
the information required. The department has been 
in the habit for five years of paying the interest in 
advance without charging anything. * ' 

This remarkable admission will attract attention for 
the reason, that the head of the Treasury Department 
distinctly states that interest had been paid in advance 
to the bond holders and bankers without any deduction 
for the use of the money, and that there was no pub- 
lic docment that would give the information required. 
The obvious reason why there were no public docu- 
ments in the treasury department, containing a record 
of the interest on bonds paid in advance was this, that it 
would show a gigantic robbery of the government by 
the banks and bond holders, and that it would awaken 
the just wrath of the people at the subservience of 
congress to the demands of the gold gambling money 

In a speech delivered by Senator Sherman in ad- 
vocacy of the national banking law, he said: — 


**We are about to choose between a permanent sys- 
tem, designed to establish a uniform national currency, 
based upon the public credit, limited in amount, and 
guarded by all the restrictions which the experience 
of man has proved necessary and a system of paper 
money without limit as to amount, except for the 
growing necessities of w^ar. ' ' 

In this declaration of the senator, he expressly ad- 
mits that the circulating notes of these banks were 
based on the credit of the Government. 

The truth is, that no safe system of bank currency 
has ever yet been devised by the wit of man, but that 
its credit is based upon that of the Government, and 
the credit of a government rests upon its taxing power, 
which is its means of self-preservation. 

To give an excuse for his change of front from an 
advocate of a legal tender Government currency, to a 
champion of the national banking system, the senator 
uses the following language : — 

"It is asked, why look at all to the interests of the 
banks; why not directly issue the notes of the Govern- 
ment, and thus save the people the interest on the debt 
represented by the circulation? The only answer to 
this question is that history teaches us that the public 
faith of the nation alone is not sufficient to maintain a 
paper currency. There must be a combination between 
the interests of individuals and the Government." 

This astonishing declaration of Senator Sherman is 
proven absolutely false by the provisions of his own 
act, the national banking law, which makes Uoited 
States bonds the sole security for national bank notes, 
and compels the Government to act as a redemption 
agency for the notes of insolvent banks. 

As the next step to secure the perpetuation of this 
robbery of the people, Congress, on the 3d of March, 


1863, authorized the Secretary of the Treasury to issue 
$900,000,000 in bonds, drawing interest at six per cent., 
and redeemable in not less than ten nor more than 
forty years. These bonds could be purchased by law- 
ful money, thereby meaning United States notes and 
treasury notes. 

There was a lapse of six days between the passage of 
the national banking act and the passage of this act 
authorizing said bond issue. 

There was yet one rival in the field which the national 
banks desired to crush, and this was the state banks 
of issue, which, at this time, had a circulation of $238,- 
677,218 in state bank currency. 

To destroy the state banks as banks of issue, and to 
drive out of circulation that species of paper money, the 
national banking money power prevailed upon congress 
to call into requisition the taxing power of the nation 
to clear the field of these competitors. 

In compliance with their demands. Congress enacted 
the following law, viz : — 

**That every national banking association, state 
bank, or state banking association, shall pay a tax of 
ten per centum on the amount of notes of any person, 
or of any state bank or state banking association used 
for circulation and paid by them. ' ' 

This great tax thus imposed by Congress upon the 
issues of state bank currency was effectual in success- 
fully accomplishing its purpose. 

The state banks, therefore, were driven to the neces- 
sity of organizing themselves into national banks, and 
this tended to a further consolidation of the money- 
lending interests of the country. 

During the early part of the year 1864, after the 


organized banks had secured the passage of the law 
depriving greenbacks of their legal tender power, and 
after the passage of the national banking law, one 
James Buell, secretary of the New York bankers' com- 
mittee, issued the following circular to the bankers of 
the country at large : — 

**Dear Sir: It is advisable to do all in your power 
to sustain such daily and prominent weekly news- 
papers, especially the agricultural and religious press, 
as will oppose the issuing of greenback money, and that 
you withhold patronage and favor from all applicants 
who are not willing to oppose the Government issue of 
money. Let the Government issue the coin and the 
banks issue the paper money of the country, for we 
can better protect each other. To repeal the law 
creating national banks or to restore to circulation the 
Government issue of money will be to provide the 
people with money, and will therefore seriously affect 
your individual profit as banker or lender. See your 
member of Congress at once and engage him to sup- 
port our interest that we may control legislation. " 

The appearance of this infamous circular stirred up 
the wrath of the people, and a wave of indignation 
swept over the land. The nefarious schemes of the 
money power were set out in this circular with start- 
ling distinctness. 

The bankers of the country were urged to combine 
their power ; the press of the country was to be cor- 
rupted, and legislation was to be controlled, to effect 
the purpose of transferring the control of the money of 
the country to the dictation of the money power. 

The associated banks of New York City, in order to 
conciliate the people who were strongly denouncing 
the scheme set forth in the circular of Buell, announced 
that this document was issued without their knowledge 


or authority. However, Mr. Buell, whose name was 
appended to this circular, was rewarded by an election to 
the presidency of the Importers' and Traders' National 
bank, of New York City, a position which has given 
him much power and prestige as one of the money 
kings of Wall street. 

The evidence is positive that this circular was issued 
with the approval, and by the orders of the associated 
banks of New York City. In the first place, the advice 
tendered to the various banks of the country was in 
complete harmony with the intentions of the money 
power, and secondly, the national banks, from that 
day to this, have carried into execution the baleful 
plan outlined in that document, as the various acts of 
congress and subsequent history abundantly prove. 

It was during the corrupt period of the war that 
immense grants of public lands were made to railway 
corporations, that donations of United States bonds, 
amounting to nearly one hundred million of dollars 
were made to the Pacific railway companies, and this 
was done during a time when the government was in 
need of funds to suppress the rebellion. 

It was during this period that Congress passed the 
notorious foreign contract labor law, through the 
operation of which, the mills, factories and mines of 
the United States were flooded with the Slavs, Huns, 
Bohemians, Poles, and various other nationalities of 
Europe, thereby laying the foundation for the count- 
less race and labor riots, that have disgraced and 
cursed the manufacturing and mining states of the 

After the suppression of the state banks of issue, the 
next step of the national bank was directed toward 


the destruction of the greenbacks and United States 
notes, and, therefore, on the 12th of April, 1866, an 
act of Congress was duly signed by the President pro- 
viding for the withdrawal and cancellation of the 
United States notes and treasury notes. 

This act provided that, within six months after the 
passage thereof, the Secretary of the Treasury was 
authorized to retire from circulation United States 
notes to the amount of ten million dollars, and for 
every month thereafter a sum not to exceed four mil- 
lion dollars. 

At the time of the passage of the act of April 12, 
1866, Hon. Hugh McCulloch, a national banker, and 
a bitter opponent of the legal tender currency, was 
Secretary of the Treasury. He had gone so far in his 
opposition to the United States notes and treasury 
notes as to denounce them as "disreputable, dishonor- 
able money. ' ' 

Secretary McCulloch immediately proceeded to re- 
morselessly contract the volume of legal tender notes, 
until $94, 000, 000 of them were withdrawn from circula- 
tion by the issue of interest bearing bonds in exchange 

On the 2d of March, 1867, an act was adopted by 
Congress providing for the redemption and retirement 
of the compound interest notes, which, at this time 
were outstanding to the amount of $159,000,000 and 
which circulated as money. 

The method of redemption was the substitution of 
temporary loan certificates in lieu of these notes. The 
amount of such certificates was fixed at $50,000,000, and 
they bore interest at the rate of three per cent per 
annum, and national banks were authorized to count 


such certificates as part of the Reserve Fund provided 
in the national banking law. 

On July 25, 1868, the Secretary of the Treasury was 
authorized to issue additional loan certificates to the 
amount of $25,000,000. 

The acts of March 2,1867, and July 25, 1868, made a 
further contraction of money to the amount of $75,- 

It will be seen, therefore, that the scheme set forth 
in the circular of James Buell was being carried out 
to the letter. 

Step by step, the national banking money power 
was gradually succeeding in driving the legal tender 
currency out of circulation, in perpetuating the public 
debt by the issue of long time bonds, and usurping 
the functions of government by the issue of bank notes. 

On the 1 8th of March, 1869, a bill entitled, "An Act 
to Strengthen the Public Credit, * ' was signed by Presi- 
dent Grant. 

The provisions of the Credit Strengthening Act de- 
clared that the public faith is solemnly pledged to the 
payment of the interest and non-interest bearing 
obligations of the government in coin or its equivalent, 
except where the law authorizing the issue of such 
obligations has expressly provided that the same may 
be paid in lawful money, or other currency than gold 
and silver. Furthermore, the United States solemnly 
pledged its faith to make provisions at the earliest 
practical period for the redemption of the United States 
notes in coin. 

This so-called Credit Strengthening Act, by force of 
its provisions, made ever)'- dollar of the bonded debt of 
the United States payable in gold and silver coin. It 


was estimated by the ablest public men of the day that 
this rascally piece of legislation added six hundred 
million dollars to the wealth of the national banks and 
bond holders. 

Let it be remembered that this bonded debt was 
purchased, to a very large extent, with treasury notes 
purposely depreciated by act of Congress, and that a 
very large portion of these bonds were bought with 
greenbacks when the latter were worth but forty 
cents on the dollar in gold. 

It should further be borne in mind, that for more 
than three years prior to the passage of this act, peace 
had been restored, the Federal authority was re-estab- 
lished over the South, slavery, the cause of the war, 
was abolished, the treasury notes and United States 
notes were appreciating in value every day since the 
establishment of peace, which, it was admitted, were 
continually adding wealth to the holders of United 
States bonds, therefore, those members of Congress 
who voted for that measure could not even urge neces- 
sity — the last plea of tyrants — as an excuse for voting 
hundreds of millions of dollars to the least patriotic of 
American citizens. 

Owing to the enormous revenues collected by the 
Federal Government, the public debt was being rap- 
idly paid, which exceedingly alarmed the national 
banking money power, who desired the perpetuation 
of the bonded debt of the United States, for without 
bonds, there would be no national banks. 

Therefore, the national banks sought by every means 
in their power to secure the perpetuation of the 
national debt, and this result could be obtained in two 
ways, first — by a heavy reduction of the public rev- 


enues; second — by funding the present debt into long 
time bonds. 

During the war heavy duties were laid upon imported 
goods, taxes were levied on incomes, railway com- 
panies, insurance companies, manufacturers, and ex- 
cises were collected on tobacco and spiritous liquors. 

The manufacturing interests of the country were 
protected from the competition of foreign goods, wares, 
and merchandise by a very high tariff, while at the 
same time they were enabled, under the provisions of 
the foreign contract labor law of July 4, 1864, to im- 
port cheap labor by the wholesale from China, Ger- 
many, Belgium, Italy, Russia, Austria, and other foreign 
nations. It was a matter of prime interest to the 
manufacturers to maintain the present high rate of 
duties on imports, and at the same time secure the 
removal of the taxes on incomes, manufactures, and 
various other forms of internal revenue. Moreover, 
the manufacturers desired the perpetuation of a huge 
public debt which would necessitate the raising of large 
revenues to meet the interest charged thereon. Furth- 
ermore, it would be to the interest of the national banks 
and manufacturers that Congress should make extrav- 
agant appropriations for the support of the Government. 

The subsequent action of these two interests taken in 
connection with the legislation procured by them from 
congress, abundantly prove that the foregoing state- 
ments are true. 

Hon. William D. Kelley, member of Congress from 
Pennsylvania, was the outspoken advocate of the manu- 
facturing interests on the floor of the house. In 1867, 
he offered the following resolution : — 


** Resolved, That the Committee on Ways and Means 
be instructed to inquire into the expediency of imme- 
diately repealing the provisions of the internal revenue 
law, whereby a tax of five per cent, is imposed on the 
mechanical and manufacturing interests of the coun- 

The resolution was unanimously adopted. 

At the same time. Jay Cooke, the head of a great 
banking firm in Philadelphia, was the agent of the 
United States Treasury, and as such agent had negoti- 
ated the sale of government bonds in England and 
America to the amount of several hundred million 
dollars, and he, therefore, assumed the position of 
spokesman for the national banking interests. 

As early as 1867, Mr. Cooke declared that the income 
tax should "Be scornfully abandoned and that right 

He laid down the following monstrous principle : — 

"We lay down the proposition that our national debt, 
made permanent and rightfully managed, will be a 
national blessing. 

"The funded debt of the United States is the addi- 
tion of $3,000,000,000 to the previously realized wealth 
of the nation. It is three thousand millions added to 
the available active capital. To pay this debt would 
be to extinguish this capital and lose this wealth. To 
extinguish this capital and lose this wealth would be an 
inconceivably great national misfortune. ' ' 

We can easily concevie wh)^ Jay Cooke, the alleged 
great financier, should give utterance to such an absurd 
statement. Mr. Cooke is an interested witness in the 
support of the ridiculous maxim ' ' That a public debt is 
a public blessing." He was realizing millions in the 
way of commissions by negotiating the sale of bonds. 


To attract the support of the manufacturers, he says : — 

'*The maintenance of our national debt is,protection. 
The destruction of it by payment is bondage again to 
the manufacturers of Europe. * ' 

In his appeal to the national banking money power, 
he says : — 

'*That is not a hazardous opinion which declares 
that in less than twenty years our national bank 
circulation will be $1,000,000,000. The currency that 
sixty-one millions of people, unequaled in industry and 
untrammeled in enterprise, will require, has got to 
have the basis of a national debt. There is no other 
foundation for it to stand on that will impart to it at 
once safety and nationality. ' ' 

It will be well to state here, that the man who gave 
utterance to these vicious propositions was overtaken 
with calamity, and the gigantic failure of his banking 
house heralded the great panic of 1873. 

The national banks at once joined hands with the 
manufacturing interests, and brought their combined 
influence to bear upon congress. 

On the first day of the session of Congress in 1867, 
Representative Kelley, known as "Pig Iron" Kelley, 
introduced the following resolution in the House : — 

' ' Resolved, That the war debt of the country should 
be extinguished by the generation that contracted it, 
is not sustained by sound principles of national econ- 
omy, and does not meet the approval of this house. ' ' 

This resolution was adopted. 

As a result of the combined influence of the national 
banking money power and the manufacturing inter- 
ests, congress eventually repealed the tax on incomes, 
manufactures, railroads, insurance companies, and 
the tax on perfumes, bank checks, and reduced the 
excise tax on whisky and tobacco. 


In all, the total taxation remitted by the general 
government, at the behest of the sordid wealth of the 
country, amounted to $227,000,000 per annum. 

Such was the process by which ill-gotten accum- 
ulated wealth escaped taxation. 

The national banking money power was not yet 
satisfied; its greed was insatiate; the more it received 
from the hands of the government the more ravenous 
its demands; and on the 14th of July, 1870, it procured 
the passage of the Funding Act through a venal and 
corrupt congress. 

This act was supplementary to the Credit Strengthen- 
ing Act of March 18, 1869, and it went one step farther 
by providing that the 5-20 bonds should be payable in 
coin. It authorized the Secretary of the Treasury to 
issue bonds to the amount of $200,000,000 in denom- 
inations of fifty dollars, or some multiple of that sum, 
redeemable in coin of the present standard value, at 
the pleasure of the United States, after ten years from 
the date of their issue, and bearing interest at the rate 
of five per cent, per annum, payable semi-annually in 
coin; also a sum not exceeding $300,000,000 of like 
bonds, the same in all respects, but payable at the 
pleasure of the United States, after fifteen years from 
their issue, and bearing interest at the rate of four and 
one-half per cent, per annum ; he was further author- 
ized to issue bonds to the amount of $1,000,000,000, the 
same in all respects as the others, but payable at the 
pleasure of the United States after thirty years from 
the date of their issue, and bearing interest at the rate 
of four per cent, per annum. 

We quote from a portion of the law as follows : — 

"All of which said several classes of bonds and the 
interest thereon shall be exempt from the payment of 


all taxes or duties of the United States, as well as from 
taxation in any form by or under state, municipal or 
local authority; and the said bonds shall set forth and 
express upon their face the above specified conditions, 
and shall, with their coupons, be made payable at the 
treasury of the United States." 

The Secretary of the Treasury was authorized to sell 
these several classes of bonds, at not less than par, 
for coin, and to redeem the 5-20 bonds, hitherto ex- 
empted from payment in coin by the Credit Strengthen- 
ing Act; or he was authorized to exchange the 5-20 
currency bonds, at their face value for the coin bonds 
provided for by the Funding Act of July 14, 1870. 

To exhibit the powerful influence exerted upon that 
congress which passed the Funding act of July 14, 
1870, we will refer to a few facts that have become 

When the Funding bill was originally introduced, 
section eight provided that on and after the ist day of 
October, 1870, national banks should deposit registered 
bonds of any denomination not less than one thousand 
dollars, issued under the provisions of this Funding 
act, and no other, with the Treasurer of the United 
States as security for notes issued to national banking 
associations for circulation under the act of June 3, 
1864. The banks were given one year in which to take 
advantage of this section to deposit the new bonds in 
lieu of the former, as security for their circulating 
notes. In case of failure to obey this act, their right 
to issue notes was forfeited. 

On their failure to deposit bonds issued under the act 
of July 14, 1870, in lieu of the bonds then on deposit as 
security for their circulation, the Treasurer and the 
Comptroller of the Currency were authorized to call in 


and destroy their outstanding circulating notes, and to 
return the bonds held as security therefor to the associ- 
ation by whom they were deposited. 

The bill containing this section originated in the 
senate, and after it passed that body and came up in the 
house for consideration, the national bankers swarmed 
in the halls of Congress and demanded that this section 
be stricken out. 

At no one time during the history of the national 
banks did their combined power appear so formidable. 

The house quailed in the presence of these money 
kings, and the section was stricken out, and the bill 
thus amended was sent back to the senate. 

The demands and methods of the banks in seeking 
the defeat of this section had become so insolent that 
even Senator Sherman rebelled. 

He said in reply to their imperious demands: — 

"Mr. President, the three remaining sections of this 
bill apply to the national banks. That is much too 
great a theme for me to enter upon at this stage of the 
debate ; but I will explain in a very few words the 
theory of those sections. The national banks are mere 
creatures of law. They hold their existence at the 
pleasure of Congress. We may, to-morrow, if it pro- 
motes the public interests, withdraw their authority. 
The franchise has been valuable to them. 

"We think it right they should aid us in funding 
the public debt. They hold of our securities $346,000,- 
000. Nearly all of these bear six per cent, interest in 
coin. We will not deprive them of any of them ; we 
will not take from them the property they enjoy; we 
will not deny them even the payment of six per cent, 
gold interest as long as they are the owners of these 
bonds. But they hold the franchise of issuing paper 
money guaranteed by the United States, and which 
constitutes the circulation of our country ; and we say 


that, enjoying this franchise, we now stipulate with 
them for the reduction of interest on the bonds 
they hold. The provisions of this bill are not arbitrary. 

"We are about to retire and cancel our notes by the 
provisions of this act. We are about to give them the 
monopoly of the circulation of this country, the sole 
and exclusive privilege of issuing paper money. We 
have destroyed the state banks. And now what do 
we require in return? That they shall join us in re- 
ducing the burdens of the public debt ; that they shall 
bear some little of their share of the loss of income 
which every holder of the public securities must suffer. 

"Sir, national banks would be very unwise indeed to 
make issue on this question. If any man here is a 
friend to the national bank system, I can claim to be. 
I was here at its cradle, introduced the original bank- 
ing bill, and advocated it, and also introduced the 
amendment to it, conducted it, and saw it passed. 
But if I believed now that the banks of the United 
States were unwilling to aid us in reducing the rate of 
interest on the public debt to the extent of the limited 
sacrifices they are called upon by this bill to make, I 
should certainly change very much my opinion of them 
and of the whole system. 

"I wish now to record my deliberate judgment that 
in this conclusion to which we have been compelled to 
arrive by the action of the house we are doing the 
national banks a great injury, which will impair their 
influence and power among the people, and that the 
opposition of the national banks to this provision which 
would have required them to aid in the funding of the 
public debt, will tend more to weaken and destroy 
them than anything that has transpired since their 
organization. I do not see how we can go before the 
people of the United States and ask them to lend us 
gold at par for our bonds, when we refuse to require 
agencies of our own creation to take them ; when we 
even refuse to require new banks not yet organized to 
take these new bonds, and when we refuse to require 
old banks, which have made on the average from fifteen 


to twenty per cent, annually upon the franchise. But, 
sir, the vote of the House shows the power of the 

national banks." 

The Senate gave way. to the banks, and these mo- 
nopolies compelled Congress to submit to their will. 

It would be presumed that Senator Sherman, judg- 
ing from the vigor of his speech against these mo- 
nopolies on this occasion, would subsequently oppose 
their future demands. Not so, however. He became 
a more devoted servant than ever in furthering the 
ambition of the national banking money power to 
monopolize the issue of paper money. 

By an amendatory act of January 20, 1871, the sec- 
retary of the Treasury was authorized to increase the 
issue of five per cent, bonds, for which provision was 
made by the Funding Act, from $200,000,000 to $500,- 
000,000, making a total interest charge upon the 
$1,500,000,000 of bonds so authorized to be issued, of 
$62,500,000 per annum. 

The outrageous legislation embodied in this Funding 
Act becomes apparent to the reader. 

In the first place, the 5-20 bonds, to the amount of 
$722,205,500, purchased with treasury notes, purposely 
depreciated by the Government at the demand of the 
gold gamblers of Wall street, were made redeemable 
in coin. 

This resulted in a gratuity of many millions of dol- 
lars to the holders of these bonds, which was nothing 
more nor less than robbery under form of law. 

Second, it created a vast debt, making an annual 
charge upon the industries of the people of $62,500,000, 
all of which, both principal and interest, was exempt 
from taxation, national, state, county, and municipal, 


creating a special privileged class who could not be 
compelled to contribute a farthing toward the expenses 
of that Government which gave them protection. 

Not only were these bond holders expressly ex- 
empted from taxes, but these non-taxable bonds opened 
a wide door for extensive frauds upon the revenues of 
state and municipal authorities. 

The process by which states, cities, counties, town- 
ships, and school districts w^ere swindled out of taxes and 
revenues was by the shifting of the ownership, nom- 
inally at least, of these bonds around the various banks 
and capitalists who returned them as non-taxable. 

For instance, banks and capitalists, when the time 
came for them to return their assessments of personal 
property, would report large holdings of these non- 
taxable bonds, which were obtained for the occasion, 
and since 1870, this resulted in swindling the various 
local governments out of countless millions of dollars 
in taxes. 

The same process by which non-taxable greenbacks 
were shifted from hand to hand, to avoid the payment 
of taxes during the period required by law for the re- 
turn of assessment lists for taxation, was adopted on a 
larger scale in the case of these non-taxable bonds. It 
set a premium on perjury. 

As these bonds were held to a very large extent in 
the great cities of the country where taxation is very 
high, in some cases equalling four per cent, on the 
dollar, it will be seen that the actual rate of interest 
on these bonds ranged from seven to nine per cent, 
per annum. 

Thus far the national banking money power suc- 
ceeded in inducing Congress to grant every demand 


made by it. Not satisfied with the enormously valuable 
privileges bestowed upon it, this subtile power con- 
tinued to appear at the opening of each session of 
the national legislature, and make new appeals for 
additional legislation in its interests. 

Each new demand of the national banks met with 
prompt compliance from Congress, and the decrees of 
this organized, voracious money power were reg- 
istered upon the statute books of the nation by the 
most corrupt legislative body in the world. 

On January 20, 1871, a bill was rushed through Con- 
gress by which the Secretary of the Treasury was auth- 
orized, in his discretion, to pay the interest on the 
national debt every three months. 

Notwithstanding the fierce opposition displayed by 
the national banks against the United States notes and 
treasury notes, in spite of the efforts of Congress to 
withdraw from circulation the war money of the coun- 
try by funding this currency into interest-bearing, non- 
taxable, long-time bonds, this paper money directly 
issued by the United States was so popular with the 
people that a very large amount remained in the chan- 
nels of trade. 

The people revered the greenback and United States 
note, as that money which came forward in time of 
deadliest peril; which armed, equipped and paid more 
than two million patriots, whose magnificent bravery 
won the greatest battles of modern times, and whose 
heroism secured the perpetuity of American institu- 
tions ; while gold, the money of kings, the loaded dice 
of stock gamblers, fled at the first approach of danger ; 
gold, whose value appreciated with every defeat of the 
Union cause; gold, that vulture which fattened and 


thrived upon the carnage of the great civil war, laughed 
the appeals of the nation to scorn. 

In consequence of the further demands of the national 
banks, Congress, on the 20th of June, 1874, amended 
the National Banking Act, which permitted these banks 
to withdraw the bonds deposited by them to secure the 
circulation of bank notes, and deposit, in lieu thereof 
as security, the non-interest-bearing notes issued by 
the Government. Prior to the passage of this amend- 
ment, United States bonds had risen to a premium in 
consequence of the various acts of Congress culminating 
in the Credit Strengthening Act, and, therefore, this 
act was adopted by Congress to enable the banks to 
withdraw the bonds deposited by them, and make a 
large profit by selling them for the premium, many of 
which had been originally purchased for less than sixty 
cents on the dollar. 

The operation of the amendment effectually con- 
tracted the legal tender currency of the country, for 
the substitution of United States notes and treasury 
notes in lieu of the bonds, diminished the volume of 
legal tender currency afloat to an extent equal to the 
bonds so withdrawn. 

During this period, the national banking money power 
began to advance the argument that the character and 
volume of money should be determined, not by the 
legislative power of the nation, but by what was called 
the *' Business interests of the country." 

It sought to educate the people to accept the doc- 
trine, that it was dangerous to permit congress ''To 
interfere with the dearest interests of the country, ' * 
and that the solution of the money question must be 
settled by the national bankers, who assumed to hold 
the key to all monetary science. 


President Grant was wonderfully impressed with this 
great discovery of the bankers and, in his message to 
congress, December 3, 1874, he gave utterance to this 
statement : — 

"The experience and judgment of the people can 
best decide how much currency is required for the 
transaction of the business of the country. It is un- 
safe to leave the settlement of this question to 
Congress, the Secretary of the Treasury or the Execu- 

The President, therefore, as far as lay in his power, 
tacitly surrendered the constitutional power of Con- 
gress and of the Executive to deal with questions of 
finance, and conferred it upon the national banks. 

The people to whom reference is made in this quota- 
tion from the President, were the national bankers, 
and the chief executive was willing to transfer? the 
power of issuing and controlling money to that class of 
men, whose sole ambition was the extortion of the 
highest rates of interest, and who loved to shave notes 
and bonds when they purchased, and exact a premium 
when they sold. 

On the 24th of January, 1875, after the congressional 
election of 1874, which returned a great Democratic 
majority in the House of Representatives, the specie 
resumption act became a law. 

The enactment of this measure carried into execution 
that part of the Credit Strengthening Act where the 
United States solemnly pledged its faith to make pro- 
visions for the redemption of the United States notes 
in coin, which now legally meant gold. 

One section of this law provided for the substitution 
of fractional silver coins for the fractional currency ; a 


subsequent section abolished the charge of one sixth 
of one per cent, for converting gold bullion into coin, 
thereby providing for the free coinage of gold at every 
United States mint 

- The most important section of the Resumption Act is 
as follows : — 

''That section 5777, of the Revised Statutes of the 
United States, limiting the aggregate amount of the 
circulating notes of the National Banking Associa- 
tions, be, and is hereby repealed, and each existing 
banking association may increase its circulating notes 
in accordance with the existing law, without respect to 
said aggregate limit; and new banking associations 
may be organized in accordance with the existing law 
without respect to said aggregate limit ; and the pro- 
visions of the law for the withdrawal and re-distribu- 
tion of national bank currency among the several states 
and territories are hereby repealed ; and whenever and 
so often as circulating notes shall be issued to any such 
banking association, so increasing its capital or cir- 
culating notes, or so newly organized as aforesaid, it 
shall be the duty of the Secretary of the Treasury to 
redeem the legal tender United States notes in excess 
of only $300,000,000 to the amount of eighty per centum 
of the sum of national bank notes so issued to any such 
banking association as aforesaid, and to continue such 
redemption as such circulating notes are issued until 
there shall be outstanding the sum of $300,000,000 of 
such legal tender United States notes, and no more. 
And on and after the ist day of January, A. D., 1879, 
the Secretary of the Treasury shall redeem in coin the 
United States notes then outstanding on their presenta- 
tion for redemption at the office of the assistant-treas- 
urer of the United States, in the city of New York, in 
sums of not less than $50. And to enable the Secretary 
of tlje Treasury to prepare and provide for the redemp- 
tion in this act authorized or required, he is authorized 
to use any surplus revenues from time to time in the 


treasury not otherwise appropriated, and to issue, sell, 
and dispose of, at not less than par in coin, either of 
the description of bonds of the United States described 
in the act of Congress approved July 14, 1870, entitled, 
'An Act to Authorize the Re- Funding of the National 
Debt,' with like privileges and exemption, to the 
extent necessary to carry this act into effect, and to use 
the proceeds thereof for the purpose aforesaid. ' ' 

A critical examination of the Resumption Act will 
disclose the sinister purpose of the organized national 
banking money power to carry into execution, to the 
letter, the instructions couched in the Hazard circular. 
One of the strange features of this act which assumes 
to restore specie payments, is found in the express 
language of this statute. While Congress, by its solemn 
legislative decree, provided for the redemption of 
United States non-interest legal tender notes in gold, 
it did not require the national banks to redeem their 
circulating notes in anywise whatever. 

On the contrary, the so-called Resumption Act pro- 
vided for the substitution of national bank notes for 
the non-interest-bearing legal tenders issued by the 
government, although the national banking law made 
the United States notes a fund to redeem national 
bank notes. 

Again: it was a contraction of non-interest-bearing 
legal tender notes, and expansion by the additional 
issue of national bank notes, which were mere promis- 
sory notes of the banks, the latter to be loaned by the 
bankers at a high rate of interest to the business men 
of the country. These circulating bank notes cost the 
bankers one cent on the dollar, and the Government was 
the redeemer of this currency. It was gold redemp- 
tion of the greenbacks by the nation, an inflation of 


paper money by the banks at a cost to them of one 
cent on the dollar. 

It was a shrewd scheme to discredit the legal tender 
currency of the country, that the national banking 
money power might inherit that rich estate of issuing 
paper money. 

Next, it repealed that part of the original National 
Bank Act which provided for the due distribution of 
the currency throughout the states and territories, 
West, as well as East, South, as well as North. And it 
speedily resulted in the absolute control of the volume 
of money by the opulent bankers of the East, for the 
great capitalists of New York City, Boston, Baltimore, 
Philadelphia, and other large eastern cities held ninety 
per cent, of the United States bonds, without which 
there could be no national bank circulation. The dom- 
icile of the bond holder determined the location of the 
national bank, and the location of the national bank 
fixed the point at which the currency of the country 
could only be obtained, and therefore, the productive 
energies of the West and South were at the mercy of 
the national banks. The two places fixed by this act 
for the redemption of legal tender notes were in New 
York City — the arena of gold gamblers, stock specula- 
tors, railroad wreckers — and San Francisco. No sum 
less than fifty dollars in United States notes would be 

The reason of this limitation is very apparent. The 
banks of New York City are the reserve agents for the 
many thousand banks scattered over the country, and, 
therefore, hold hundreds of millions of dollars in 

By hoarding the legal tender notes received in the 


ordinary course of business, the banks of New York 
City were enabled to accumulate many millions of 
United States notes, and present them for redemption 
at the sub-treasury ; but the plain citizen who could 
not command fifty dollars of these notes was barred 
from the benefits of the Resumption Act. 

The United States presented the key of the National 
Treasury to the national banks, with an implied invita- 
tion to help themselves to every thing in sight. It 
was a Government of national banks, for the national 
banks, and by the national banks. 

Provision was made for the issue of bonds to obtain 
gold to redeem these legal tenders, and this was a part 
of the scheme to perpetuate the national debt, and as 
Jefferson said: "To swindle futurity on a large scale. " 

At the time of the passage of the laws upon which 
comment is made, General Grant was President of the 
United States. 

The career of President Grant is one of the most 
unique and instructive in history. Of comparatively 
humble, but respectable origin, he did not, prior to 
the civil war, give any indications of winning that 
world-wide fame which has become the heritage of the 
American people. 

That fratricidal strife was the tide that carried Gen- 
eral Grant from obscurity to the highest pinnacle of 
renown. It was in the character of soldier that he 
gained an illustrious name. 

In his character as a man, he gave abundapt proof 
of many admirable traits, among which were magna- 
nimity toward the vanquished, unimpeachable personal 
integrity, and lasting tenacity in his friendships, in 
which latter attribute he bore a striking resemblance 
to General Jackson. 


Yet this distinguished man of iron nerve became as 
plastic as wax in the hands of those to whom he 
attached himself, and his confidence in his trusted 
advisers was shockingly abused for the furtherance of 
many selfish and dishonest schemes. It is this latter 
fact that gave birth to those shameless abuses and 
scandals which have sullied the pages of political 

Many eminent public men are of the opinion that his 
administration of civil affairs did not tend to the 
enhancement of his fame. 

A summary of the war legislation, in so far as it 
relates to the finances of the Government, exhibits these 
remarkable facts as to the existence of a remorseless 
money power: 

First, Congress at the demand of the bullion brok- 
ers and gold gamblers of New York City and Boston, 
purposely depreciated the currency issued by the gov- 
ernment by striking out its legal tender qualities, by 
refusing to receive its own money in payment of its 
taxes. It was high priced gold for the bond holder, 
and depreciated greenbacks for the patriotic soldier 
who offered up his life for his country. 

Second, The passage of the national banking law, 
by which the government delegated its highest sover- 
eign power — that of issuing money — to private corpo- 
rations for private gain, resulting in a privileged class 
of capitalists, whose interests were wholly antagonistic 
to the welfare of the United States, thereby making a 
permanent creditor and debtor class, one the master, 
the other the servant. 

Third, An alliance, offensive and defensive, of the 
national banking money power and the manufacturers, 


whose combined interests have dominated the legisla- 
tion of Congress, by which the banks have practically- 
secured a monopoly of the medium of exchange, and 
by which the manufacturers have secured a high pro- 
tective tariff for their immediate benefit, and at the 
same time flooded their mills and factories with cheap 
foreign labor. 

Fourth, The passage of laws, the effect of which 
was to enormously increase the untaxed wealth of a 
privileged class, who extort heavy tribute from the 
productive energy of the American people. 

Fifth, The creation of a money power, foretold by 
Andrew Jackson, whose unlimited greed has appropri- 
ated to its own use the greatest portion of the wealth 
of the United States. 

Sixth, A matured plan to perpetuate the public debt 
of the United States for the purpose of holding the 
people in subjection to the money power. 

Seventh, An enormously extravagant administra- 
tion of the Federal Government, as a part of the plan 
to fix a permanent debt on the nation. 

Eighth, Senator Sherman, during all this period, 
was the chairman of the Finance Committee of the 
Senate, and he was the influential agent of the money 
power who shaped and molded that legislation, upon 
which was reared that imperial combination of mon- 
eyed influence which, to a very large extent, rules the 
press, the pulpit, the legislative bodies, and the courts 
of the country. 

In view of the various financial measures enacted by 
Congress from 1865, to the passage of the Resumption 
Act of 1875, all of which tended to greatly appreciate 
stocks and bonds, and to divest the Government of its 


undoubted power to issue full legal tender United 
States notes, or greenbacks, the following significent 
extract from the most influential journal of Great Brit- 
ain, the London Times, is hereby subjoined. 

In 1865 the Times editorially stated: — 

"If that mischievous financial policy which had its 
origin in the North Am^erican Republic during the late 
war in that country should become indurated down to 
a fixture, then that Government will furnish its money 
without cost. 

"It will have all the money that is necessary to carry 
on its trade and commerce. 

"It will become prosperous beyond precedent in the 
history of the civilized nations of the world. The 
brain and wealth of all countries will go to North 
America. That Government must be destroyed or it 
will destroy every monarchy on this globe." 



"The high-handed career of this institution imposes 
upon the constitutional functionaries of this govern- 
ment, duties of the gravest and most imperative char- 
acter — duties which they can not avoid, and from which 
I trust there will be no inclination on the part of any 
of them to shrink. " — Andrew Jackson. 

The success of the national banking money power 
in securing control of Congress, and, through that 
body, an oppressive monopoly of the currency of the 
country, met the most sanguine expectations of the 
men who hoped to rule the industries of the people 
with an iron hand. 

The outlines of that great scheme of the national 
banks, which aimed to throw the entire business of 
the country on a credit basis, were now plainly appar- 
ent, and it became patent that the plan was to be con- 
summated by placing the entire volume of currency in 
the hands of the bankers. 

Under the workings of the national bank system, 
all circulating bank notes, before they would reach 
the hands of the mass of the people and thus be thrown 
into the channels of trade, must first pass through the 
toll gates erected over the counters of the bankers, 
making them at once the lenders of money, and the 
great majority of our citizens, borrowers of that cur- 
rency, gratuitously bestowed by the government upon 
the wealthiest moneyed corporations of the United 



All the industries were compelled to pay usury to 
the most traitorous class of our citizens. The banks 
were enable^ to lay the foundations of that colossal 
structure of credit, which has plunged the people into 
an abyss of indebtedness from whence they will not 
emerge for generations. 

Up to the time of the passage of the Resumption 
Act, the banking monopoly saw no difficulty standing in 
its way to keep it from being the master of all the prop- 
erty and industry. While corrupt congresses, notorious 
for the infamoTis scandals which smirched the reputa- 
tions of some of the foremost men of the Republican 
party, bartered away the most precious rights of the 
people, nature came to the rescue by affording a great 
supply of that most precious metal — silver. 

The bank monopoly at once caught the alarm, and 
the plan was matured in London and Wall street to 
assassinate the silver dollar. 

Under the free coinage of gold and silver, the 
national banks could not control the volume of money, 
and, therefore, the position taken by this monopoly 
was an essential part of that gigantic conspiracy to 
demonetize silver, and thus maintain its grasp on the 
property of the people ; furthermore, a fight must be 
waged against the standard silver dollar as a part 
of the scheme to sustain the supremacy of New York 
City as the great money center of the country. 

Moreover, an adequate supply of silver meant the 
freedom of the agricultural districts of the West and 
South from the financial domination of the cent per 
cent, men of the East. 

The national bank autocrats saw, in the rich deposits 
of silver in the Western States, the danger that men- 


aced their power, and they made haste to strike down 
the silver dollar, which, in their fears, would become 
the regenerator of the financial condition of the 
people. Silver dollars meant cash, national bank notes 
meant credit, and therefore the bond-holders and bank- 
ers of London and New York City decreed that silver 
must die. ' 

As a preliminary statement of the reason for the 
opposition of national banks to the coinage of silver, it 
must be bom in mind, that prior to the adoption of the 
Federal Constitution, the United colonies, under the 
Articles of Confederation, had no power to establish 
mints, and, therefore, they had no national system of 

This want of uniform coinage and currency laws 
was one of the urgent reasons which led to the assem- 
bling of the constitutional convention that eventually 
framed the national charter. 

This body of able and learned men, justly celebrated 
for their wisdom and knowledge, provided for a uni- 
form system of money for the people. They knew that 
without a national system of coinage and currency, no 
people could become great in commerce and industry. 
The power of determining what should constitute 
money, was lodged in the general government by that 
part of section eight, of article one, of the constitution, 
which is as follows: "Congress shall have power to 
coin money, regulate the value thereof and of foreign 
coin. ' ' 

The convention which framed this great instrument 
contained some of the ablest political economists and 
financiers of that day, among whom were Benjamin 
Franklin, Robert Morris, the eminent banker, James 


Madison, Alexander Hamilton, and Gouveneur Morris. 
These distinguished men knew that the essential nature 
of money was its function as a medium of exchange, 
and they knew that this function was impressed by the 
sovereign power of the nation. 

Hence, the power to coin money and to regulate its 
value, was decreed to fall within the sphere of the law- 
maker, rather than left to the ability of those who cor- 
ner gold and silver to enhance their profits. 

The absurd theory of our modern statesmen that 
commerce, and not law, fixes the value of money has 
never been recognized as sound doctrine until the 
national banking monopoly demanded the power of 
issuing currenc)^ as a vested right. 

Upon the adoption of the Constitution, and after the 
election and inauguration of General Washington to 
the presidency of the United States, Congress, on 
the 2d of April, 1792, enacted the first coinage law 
under the new order of things. The system of coin- 
age adopted by Congress, was based on the decimal 
plan which sprung from the imperial intellect of Jeffer- 
son, to whom belongs the honor of inventing and 
establishing that great reform. 

The Coinage Act of April 2, 1792, is as follows: — 

*'That the money of account of the United States 
shall be expressed in dollars or units, dimes or tenths, 
cents or hundredths, mills or thousandths, a dime being 
the tenth part of a dollar, a cent the hundredth part of 
a dollar, a mill the thousandth part of a dollar and that 
all accounts in the public offices and all proceedings 
in the courts of the United States shall be kept and 
had in conformity to this regulation. 

"That a mint for the purpose of a national coinage 
be and the same is established, to be situated and car- 


tied on at the seat of the government of the United 
States for the time being. 

**There shall be, from time to time, struck and 
coined at said mint, coins of gold, silver, and copper, 
of the following denominations, values and descrip- 
tions; viz.. Eagles, each to be of the value of ten dol- 
lars, or units, and to contain 247^ grains of pure, or 
270 grains of standard gold. Half eagles, each to be of 
the value of five dollars, or units, and to contain 123^ 
grains of pure, or 135 grains of standard gold. Quarter 
eagles, each to be of the value of two and one-half dol- 
lars, and to contain 61^ grains of pure, or 67 >^ grains 
of standard gold. Dollars or units, each to be of the 
value of a Spanish milled dollar, as the same is now 
current, and to contain 3715^ grains of pure, or 416 
grains of standard silver. Half dollars, each to be of 
half the value of the dollar or unit, and to contain 
1855^ grains of pure, or 208 grains of standard silver. 
Quarter dollars, each to be of one-fourth the value of 
the dollar or unit, and to contain 92^1 grains of pure, 
or 104 grains of standard silver. Dimes, each to be 
one-tenth of the value of a dollar or unit, and to con- 
tain 37>^ grains of pure, or 41^ grains of standard sil- 
ver. Half dimes, each to be of the value of one-twenti- 
eth of a dollar or unit, and to contain iSy^-g. grains of 
pure, or 2o|^ grains of standard silver. Cents, each to 
be of the value of one hundredth part of a dollar, and 
to contain 11 pennyweights of copper. Half cents, 
each to be of the value of half a cent, and to contain 
5^ pennyweights of copper." 

The ratio of the value of gold to silver in all coins 
provided for by the act of April 2, 1792, was fixed at 
fifteen to one, that is to say, the statute made fifteen 
pounds weight of pure silver equal in value in all pay- 
ments to one pound weight of pure gold. 

Section Fourteen of this act provided for the free 
coinage of gold and silver in the following language: — 

*'That it shall be lawful for any person or persons to 


bring to the said mint gold and silver bullion, in order 
to their being coined; and that the bullion so brought 
shall be there assayed and coined as speedily as may 
after the receipt thereof, and that free of expense to 
the person or persons by whom the same shall have 
been brought." 

The free coinage thus provided for by the act of 
April 2, 1792, placed gold and silver coinage directly 
in the hands of the people. The money thus coined 
would not be compelled to go through the banks as 
intermediaries before it reached the channels of trade. 

This coinage law was the joint product of the study 
and research of Hamilton and Jefferson, and it made 
the silver dollar containing 371^ grains of pure silver, 
the unit of account in the exchange of commodities 
and for the payment of debts. 

It may be inquired wh)^ the Spanish milled dollar 
was taken as the basis of the American unit of 

At that time, Spain was the great dominating power 
in the western hemisphere, and she exercised jurisdic- 
tion over what is now Texas, California, New Mexico, 
Nevada, Mexico proper, the Central American States, 
the greater portion of South America and the West 

It was the mines of the Spanish colonies, from 1500 
to 1800, that poured hundreds of millions of the pre- 
cious metals into the lap of European commerce. 

A single mine of South America produced silver to 
the amount of $600,000,000. 

During the period that the Spanish colonies poured 
forth their streams of wealth, and saved the dying 
industries of Europe from total extinction, the chivalry 
of Christian England went forth in their piratical craft 


in a time of peace, and plundered the Spanish treasure 
ships of their rich cargoes. British historians yet 
gloat over the naval prowess that robbed an unoffend- 
ing power in time of profound quiet. 

The reasons why this young republic appropriated the 
Spanish milled dollar as the model upon which to base 
its coinage laws were these : First, a large number of 
Spanish coins were in circulation in this country, and 
these coins were of a very high standard of purity ; 
second, the people were familiar with the Spanish 
milled dollar, and its adoption as money saved the 
expense of re-coinage ; third, the United States main- 
tained an extensiv^e commerce with the Spanish West 
Indies, and the adoption of a coin similar to the Span- 
ish dollar facilitated trade wonderfully, and gave the 
enterprise of this country the advantage over that of 
foreign nations, whose system of coinage did not cor- 
respond with that of Spain and her colonies. 

To give the reader a correct understanding of the 
coinage laws of the United States from 1790 to 1873, 
the following summary of the various enactments of 
congress providing for the mintage of gold and silver 
coins will be necessary. 

The act of congress of March 2, 1799, fixed the value 
of foreign coins, and made them legal tender. 

On April 10, 1806, the gold coins of Great Britain 
and Portugal, as well as those of France and Spain, 
were made legal tender for the payment of all debts 
and demands within the United States. The same 
act of congress made the Spanish milled dollar and 
the crown of France, which were silver coins, legal 
tender and current in this country. 

During the year 1805 President Jefferson suspended 


the coinage of the silver dollar at the United States 

The reasons adduced by him in ordering the cessa- 
tion of the coinage of the dollar were stated in a report 
made by Mr. Ingham, Secretary of the Treasury under 
President Jackson. 

Secretary Ingham said that President Jefferson ascer- 
tained that the newly coined silver dollars, being of 
full weight, bright, and clean, were shipped out of the 
country by speculators; second, it was a useless ex- 
pense to coin these dollars, when the law made the 
foreign silver coins full legal tender for the payment 
of all debts, public and private; third, it was more 
desirable to coin silver bullion into half dollars, quar- 
ter dollars, dimes and half dimes to serve as change. 

By act of Congress, March 5, 1823, the gold coins of 
Great Britain, Portugal, France and Spain were 
received in payment by the United States on account 
of sales of public lands. 

By act of June 25, 1834, the following silver coins 
were made of legal value, and passed current as money 
within the United States for the payment of all debts 
and demands at the rate of one hundred cents to the 
dollar; viz., The dollars of Mexico, Peru, Chili, and 
Central America ; this act fixed the value of the Bra- 
zilian dollar, and the silver five- franc piece of France 
and it passed current. 

By the same act, the gold coins of Great Britain, 
Portugal, Brazil, France, Spain, Mexico, and Columbia 
were made legal tender for the payment of all debts 
and demands within the United States. 

On the 28th of June, 1834, the quantity of gold in the 
eagle, or ten dollar piece, was reduced from 247^ 


grains of pure gold to 232 grains, the amount of stand- 
ard gold in that coin was reduced from 270 grains to 
258 grains. 

Under the act of April 2, 1792, the legal ratio of sil- 
ver to gold was fifteen to one, which ratio undervalued 

Since 1803, France and the Latin countries adopted a 
legal ratio of fifteen and one half of silver to one of 
gold, and as a consequence, gold, being undervalued 
in the United States, was withdrawn from circulation 
here, and sold abroad at a profit by the bullion brokers 
who were ever on the alert for gain. 

The change made the act of June, 1834, undervalued 
silver, the ratio of that metal to gold being fixed at 
fifteen and ninety-eight one-hundredths to one. 

But the principal reason assigned for the overvalua- 
tion of gold by the act of June 28, 1834, was to provide 
coins of large denominations to take the place of the 
notes and bills issued by the United States Bank. In 
other words. President Jackson fought the United 
States Bank with a gold coinage as a legitimate wea- 
pon to conquer that money power. 

It has become the settled policy of those financiers 
who so urgently advocate a single standard of gold, 
to point to the act of June 28, 1834, as the establish- 
ment of that system. This has been the gist of the 
numberless arguments of the gold standard advocates, 
constantly reiterated in the halls of congress and else- 
where, with a brazen disregard of truth that approaches 

The congressional legislation by which a very large 
volume of gold coin was brought into circulation after 
1834, was directly opposed to that policy which secured 
the demonetization of silver in 1873. 


It is an absolute falsehood to assert that the single 
standard of gold was adopted by this nation in 1834, 
for the plain reason that the mints of the United States 
remained open to the free and unlimited coinage of 
both gold and silver, and the law made these coins full 
legal tender for the payment of all debts and demands, 
both public and private. 

The silver dollar still remained the unit of account. 

By the act of January 18, 1837, a slight change was 
made in the alloy in the gold and silver coins. The 
standard of purity was fixed at nine tenths of pure 
metal to one tenth of alloy. 

By this alteration in the purity of the coin, the 
standard was raised, and, therefore, the weight of the 
silver dollar and fractional silver coins was slightly 

The material part of that act is as follows : — 

*'The standard for both gold and silver coins of the 
United States shall hereafter be such that of one thou- 
sand parts by weight, nine hundred shall be of pure 
metal and one hundred of alloy, and the alloy of silver 
coins shall be of copper, and the alloy of the gold coins 
shall be of copper and silver, provided that the silver 
does not exceed one half of the alloy. 

"Of the silver coins the dollar shall be of the weight 
of 412^ grains, the half dollar of the weight of 2063^ 
grains, the quarter dollar of the weight of 103% grains, 
the dime or tenth part of a dollar of the weight of 415^ 
grains, and the half dime or twentieth part of a dollar 
of the weight of 20^ grains. 

"And that dollars, half dollars, quarter dollars, dimes 
and half dimes shall be legal tender of payment accord- 
ing to their nominal value for any sums whatever. 

"Of the gold coins, the weight of the eagle shall 
be 258 grains, that of the half eagle 229 grains, and of 
the quarter eagle 64^ grains. 


"And that for all sums whatever, the eagle shall be 
a legal tender of payment for ten dollars, the half 
eagle for five dollars, and the quarter eagle for two 
and one-half dollars." 

The alloy in the silver dollar was reduced in quan- 
tity, while the pure silver of 37 1^ grains, as originally 
fixed by the act of April 2, 1792, was retained in the 
standard dollar, and it remained the unit of account 
and was of unlimited legal tender. 

This fact is borne out by the act of March 3, 1849, 
which provided for the coinage of double eagles and 
one dollar gold pieces. 

We will quote the exact language of this statute, 
which is as follows : — 

"There shall be from time to time struck and coined 
at the mint of the United States and branches thereof — 
conformably in all respects to law, and conformably in 
all respects to the standard for gold coins now estab- 
lished by law — coins of gold of the following denomina- 
tions and value ; viz. , double eagles, each to be of the 
value of twenty dollars or units, and gold dollars, each 
to be of the value of one dollar or unit. 

"For all sums whatever the double eagle shall be a 
legal tender for twenty dollars, and the gold dollar 
shall be a legal tender for one dollar. ' ' 

This statute explicitly recognizes a unit, and that 
unit of the exchange value of money was the silver 
dollar, the coinage of which was provided for by the 
act of April 2, 1792. The value of these gold pieces 
were respectively fixed by referring them to a unit, 
and up to this time the sole unit of account in the 
United States from which calculations were made was 
the silver dollar. 

By act of congress February 21, 1853, a change 


was made by reducing the weight of the fractional 
silver coins. 

The language of this statute is as follows : — 

'*That the weight of the half dollar or piece of 
fifty cents shall be 192 grains, and the quarter dol- 
lar, dime and half dime shall be respectively one-half, 
one-fifth and one-tenth of the weight of the' half dollar. 

"The silver coins issued in conformity with the 
above section shall be legal tenders in the payments 
of debts for all sums not exceeding five dollars. 

"From time to time there shall be struck and coined at 
the mint of the United States and the branches thereof 
conformably in all respects to the standard of gold 
coins now established by law, a coin of gold of the 
value of three dollars or units. ' ' 

This act, which was the first legislation limiting the 
legal tender quality of silver coins, is pointed to by 
the single gold standard advocates as a demonetization 
of silver. 

In order that we may ascertain the intention of Con- 
gress in enacting this law, it will be necessary to look 
at contemporaneous history, the evils sought to be 
corrected, and the remedy applied. 

The highest courts of the land have adopted this 
principle as the cardinal rule in the interpretation and 
construction of statutory law, and it is a safe one for 
the ordinary individual. 

At the time of the passage of this act of Congress, 
the bullion in the silver was more valuable as a com- 
modity than the bullion in the gold dollar, conse- 
quently the silver dollars were withdrawn from circu- 
lation and sold as bullion in the European markets at 
a profit. 

To remedy this, Congress reduced the weight of the 


fractional silver coins, and limited their legal tender 
debt-paying power, but left the coinage of the silver 
dollar free and unlimited. 

Congress correctly foresaw that the owners of silver 
bullion, from motives of self interest, would not coin 
their bullion into silver dollars, when they would be 
gainers by its coinage into light weight fractional 

It would require 412}^ grains of standard silver for 
a one dollar piece, or unit, but it would need only 384 
grains for the coinage of two half dollar pieces. 

The limitation of legal tender power of the frac- 
tional silver coins under the act of 1853, was embodied 
in that law for the express purpose of preventing their 
exportation to foreign countries. 

Another reason for the enactment of this statute 
arose from the fact that the miners of California and 
Australia were pouring hundreds of millions of dollars 
of gold into the arteries of commerce, and a number of 
leading financial writers of France and Germany urged 
their respective countries to demonetize gold, for the 
express purpose of increasing the value of bonds and 

Michel Chevalier, a member of the Council of State 
of Napoleon III. at this time, published a work 
entitled, "The Probable Fall in the Value of Gold." 

In this volume he strongly urges the demonetization 
of gold, giving as his reason for this position that it 
was becoming too abundant, and that its purchasing 
power had greatly fallen. 

Chevalier says: — 

*'If we would particularize the persons who would 
be more or less deeply affected by the fall in 


gold, we have only to select those whose income 
will not find itself augmented naturally and by a self- 
adjusting process, in exact proportion to the fall, in 
gold. The national creditor is the characteristic type 
of this class of sufferers. All those persons whose 
incomes, expressed in monetary units, remain the same 
would be injured by the change to the extent of the 
half of their income, all other things being equal. 

"All commodities excepting gold and every kind of 
property excepting that of which the income is, from 
the present, fixed, as is the case with government 
funds, ought, from the moment that the monetary 
crisis is terminated, to have attained in a gold currency 
double the price which they are at present worth. It 
will be the same eventually with wages (that is to say 
wages would double), and with all personal services, 
whether rendered in the factory or on the farm, or 
from the liberal professions. ' ' 

In summing up his arguments in favor of the demon- 
etization of gold. Chevalier states the following con- 
clusions : — 

"Thus as a definite analysis, the properties of 
lands, houses, and other real estate, manufactur- 
ers, merchants, and their auxiliaries of every 
kind ; public functionaries of all ranks ; and also those 
who follow the different learned professions, will all 
find themselves in the end compensated in the new 
state of things with advantages which they now enjoy, 
all other things being equal. It is another class of 
persons, the national creditor, whom we have previously 
defined in a general way who have to submit to a sac- 
rifice in the proportion to the fall in the precious metal. " 

In his plea for the bond holders, Chevalier, unlike 
those American financiers who worship a single stand- 
ard, displays one admirable trait. He truthfully states 
the reasons why he urges the destruction of gold as 
money. He says that the coinage of those large 


amounts of gold from the mines of California and 
Australia will double the volume of money, and there- 
fore diminish its purchasing power one-half, and that 
the bond holder would suffer loss. 

Finally, Chevalier sums up the effect of a change 
from falling prices to rising prices, in which he said : — 

' ' In time the change will profit those who live by pres- 
ent labor; it will injure those who live on the fruits of 
past labor, be it their own or that of their fathers. In 
this respect it will act in the direction with the greater 
part of those evolutions which are accomplished in vir- 
tue of the great law of civilization to which ordinarily 
we assign the noble name of Progress. 

*'It remains to add that in society as it is at present 
organized, the number is very small of those whom it 
can truly be said that they live on the fruits of past 
labor. Real property, rents, and the interest of invest- 
ment depend in such a degree on the present labor of 
those who pay them, that in an important sense those 
who receive them live rather on the present labor of 
others than upon past labor." 

Chevalier positively admits that a small volume of 
money benefits a very small number, and those are 
the most undeserving. 

The American gold standard advocate is not so 
frank in his reasons for a single standard. Every 
national banker, and single gold standard financier is 
in favor of that system of finance, because the laboring 
man, the widow, and the orphan will be the sole bene- 
ficiaries of a contracted volume of money? 

The arguments of that class of political economists 
teem with figures, showing that the workingmen, 
widows, and orphans are the chief stock holders in 
national banks, loan and trust companies, and that they 
constitute the largest class of depositors in savings 


banks, hence, the fear of this philanthropic (?) class 
of disinterested patriots, that the poor toiler, the friend- 
less widow and orphan must be protected by a single 
standard of gold ! 

Germany and some of the smaller European states 
actually demonetized gold in 1857, and adopted a 
silver standard. 

From the action of these states in thus attempting 
to cripple the United States by demonetizing gold, 
and going on a silver basis, a great struggle arose in 
Germany and Austria to obtain silver. 

Therefore, to prevent these countries from drawing 
their supplies of that metal from the United States, 
Congress reduced the weight and limited the legal 
tender power of the minor silver coins, and thus the 
volume of silver in circulation here was protected 
from exportation to the silver standard countries. 

Furthermore, Congress now endeavored to supply 
the people with a uniform system of gold and silver 
coinage, and, in the execution of that policy, enacted 
the law of March 3, 1853, which provided that the Sec- 
retary of the Treasury should establish an assay office 
in the city of New York, for the assaying and casting 
of gold and silver bullion and, foreign coin into bars, 
ignots, or disks, and the assistant treasurer at New 
York was made the treasurer of such assay office ; and 
he was authorized, upon the deposit of gold or silver 
bullion or foreign coin, and the ascertainment of its net 
value, '*To issue his certificate of the net value thereof 
payable in coins of the same metal as that deposited. ' ' 

The certificates so issued by the assistant treasurer 
were made receivable at any time within sixty days 
from the date thereof, in the payment of all debts due to 


the United States at the port of New York for the full 
sum therein certified. 

Thus the foreign importer, in the payment of the 
duties on goods, wares, and merchandise at the custom 
house, would take his foreign coin to the assay office, 
have its fineness determined, obtain a certificate for 
the amount of its value, and pay the duties imposed 
upon his goods with said certificate. Such foreign 
coins were cast into bars and transformed into coins 
of the United States. 

By the act of February 21, 1859, Congress fixed the 
value of the fractional parts of the Spanish pillar dol- 
lar, and the Mexican dollar as follows; viz., ''The 
fourth of a dollar, or piece of two reals at twenty 
cents, the eighth of a dollar, or piece of one real at ten 
cents, and the sixteenth of a dollar, or half-real, at five 
cents. ' ' 

These coins at the valuations thus fixed by law were 
receivable at the Treasury of the United States, the 
post offices, and land offices, as legal tender for the 
payment of debts and demands. 

The former acts of Congress, authorizing the circu- 
lation of foreign gold and silver coins, and declaring 
the same a legal tender for the payment of debts, were 

The reason for the repeal of former laws declaring 
foreign gold and silver coins legal tender was based 
on the following facts: first, the United States had 
become, with the discovery of the rich gold mines of 
California, the greatest producer of gold in the world, 
and it endeavored to supply the people with a volume 
of coins stamped in American mints; second, nearly 
sixty years had elapsed since the passage of the first 


coinage law, and the capacity of the United States 
mints being greatly increased, Congress, by said 
repeal, aimed at a re-coinage of the foreign gold and 
silver coins into American coins, and by this means 
supply a homogeneous circulation of gold and silver. 

Six years had elapsed since the passage of the law 
of March 3, 1853, authorizing the issuing of certificates 
for deposits of foreign coin, and the act of February 
21, 1859, was merely an accumulative statute to that 
act for the transformation of foreign coin into that of 
the United States. 

The latter act did not take away the privilege of the 
holder of foreign coin to receive certificates of deposit 
at the assay oflfice in New York City, and the issuance 
of these certificates was of great convenience to the 
owner of bullion and such coin. From the act of 
March 3, 1853, dates the origin of gold and silver 

From 1859 to 1873 but few changes were made in the 
coinage laws, and these were comparatively unimport- 
ant in their nature. 

Prior to 1861, the annual production of silver in the 
United States never exceeded the value of $100,000, 
on the other hand, the amount of gold produced 
in the mines of California, from 1848 to the out- 
break of the war, amounted to hundreds of mil- 
lions of dollars. The greatest amount of gold pro- 
duced from American mines in any one year was in 
1853, when it reached the enormous sum of $65,00.0,000. 
The total product of gold from the mines of the United 
States, from 1848 to 1861 inclusive, reached the grand 
total of $700,000,000. 

In the year 1859, that great deposit of silver, the 


Comstock Lode, was discovered in Nevada, and from 
this period the United States is reckoned among the 
greatest producers of silver in the world. 

In i860 the production of silver had risen to $150,000, 
which, up to this period, was the greatest amount pro- 
duced in the United States in any one year. In the 
same year the production of gold in California alone 
was $45,000,000 in value. 

In 1863, the value of the product of silver had risen 
to $8,500,000. 

In 1867, silver to the amount of $13,500,000 was pro- 
duced from the mines of the west — chiefly in Nevada. 

The production of gold for the same year w^as 

At this period, the national debt had reached the 
enormous sum of $2,700,000,000, the interest of which 
was payable in coin. 

The whole annual product of the gold mines in the 
United States would scarcely suffice to pay one-half of 
the annual interest charge upon the national debt held 
by the national banking money power. 

Therefore, the control of the gold supply of the 
country was in the firm grasp of the national banks 
and bond holders. 

It is much easier for the money power to manipulate 
the volume of gold than that of silver, in as much as 
gold contains a much greater value in a proportionately 
smaller bulk than silver. 

Again, gold bullion is converted into coins of large 
denominations, chiefly ten and twenty dollar gold 
pieces ; while silver is coined into dollars and fractional 
parts thereof. 

From the foregoing facts, gold is the money of the 
wealthy, while silver is the money of the laborer. 


It is the small coins that most actively circulate in 
the channels of trade ; it is gold that is hoarded by the 
miser and the capitalist. 

The small coins that are in active circulation have 
always eluded every effort to hoard them in large 

The rapid increase in the production of silver in the 
United States meant the financial liberation of the 
people from the money power of the East. The pros- 
pects for an enormous supply of silver from the west- 
ern mines threatened the supremacy of New York City 
and London as the money markets of the world. 

The owner of silver could take his bullion to the 
mint, have it coined into standard silver dollars of full 
legal tender debt paying power, receive them after 
their mintage, and transact business by their means ; 
he was not under the necessity, when in need of 
money, to make application to a national bank for a 
loan of its circulating notes, whose sole credit rested 
on the solvency of the United States. He was not 
compelled to pay toll to the national banks for the 
use of their debts as money. 

The national banking money power could not con- 
trol the silver dollar, as long as the law authorized its 
free coinage, and consequently, a gigantic conspiracy 
was formed in London and New York City to demone- 
tize silver. 

This great money power whose almost absolute con- 
trol of the currency was surely driving all business to 
a credit basis, deliberately planned the destruction of 
that precious metal whose value Mas been far more 
stable than that of gold. 



"I have before me the record of the proceedings of 
this House on the passage of that measure, a record 
which no man can read without being convinced that 
the measure and the method of its passage through 
this House was a 'colossal swindle. ' I assert that the 
measure never had the sanction of this House, and 
it does not possess the moral force of law. ' ' — William 
S. Holman. 

Prior to the demonetization of silver in the United 
States, England and Portugal were the only nations 
whose standard of moneta.ry value was based on gold. 

After the great Napoleonic wars which convulsed 
Europe for so many years, finally ending in the over- 
throw of the military power of France at Waterloo in 
1 815, the national debt of England reached a colossal 
figure, exceeding four billions of dollars. 

This vast debt was created by the efforts of Great 
Britain in her struggle to crush Napoleon. 

The greater portion of this immense burden on the 
industries of the people of that country was purchased 
at a very heavy discount by the bond holders. 

At this time England was the great naval power of 
the world, and her merchant vessels entered the ports 
of every civilized and semi-civilized nation ; and she 
made good her boast that she was "Mistress of the 

In 1 816, England adopted a single gold standard as 
the basis of her financial system. Silver was made a 



legal tender to an amount not exceeding forty shillings 
for any one payment. 

This act of parliament was procured through the 
influence of the immensely wealthy bankers and fund 
holders, with the sole aim of enhancing the value of 
the vast debt held by them, and with the avowed pur- 
pose of perpetuating its existence. 

Sir Moreton Frewen, an eminent writer and financier 
of London, charges that this measure was instigated 
by the capitalists of England, and that it was class 
legislation of the worst type. 

The financial system thus adopted by parliament 
during the ministry of Lord Liverpool consisted of 
gold as the standard of value, silver as subsidiary coin 
used in the small transactions of business, and notes 
issued by the Bank of England, the latter being a 
credit currency redeemable in gold by the bank. 

In 1844, the charter of the Bank of England was 
amended by act of parliament, by which that corpora- 
tion must pay for all gold bullion or mutilated coins 
offered at its counter, the sum of three pounds, seven- 
teen shillings, and nine pence for each ounce of gold 
tendered to it. This price was equivalent to eighteen 
dollars and ninety-two cents in money of the United 

This act of parliament was the matured result of the 
policy of Sir Robert Peel, at that time the Prime Min- 
ister of England, and it fixed the price of gold through- 
out the British empire in every part of the world, and 
it gave notice to the owners of gold bullion every- 
where, that this great bank stood ready, at all times, 
to pay the price fixed by the law of its creation. Gold 
would never go below that price, although there was no 


limitation in the law by which the bank was forbidden 
to pay more for that precious metal. 

The evident purpose of that policy fixing the min- 
imum value of gold was the prohibition of speculation 
in it by bullion brokers. Another important object of 
the passage of this law was to make London the money 
market of the world, and therefore the center of 

Moreover, at the time of the parliamentary act of 
1844, the colossal debt of England was payable in 
gold, and the fund-holding class of Great Britain was 
instrumental in procuring the passage of this act, fix- 
ing the minimum price of gold by law with the avowed 
intention of enhancing its purchasing power over all 
other forms of property. 

The policy embodied in the Peel Act is the basis of 
the financial system of England. 

After the close of the civil war in America, Great 
Britain had become a large holder of United States 
bonds, railway stocks, and securities, and other obliga- 
tions of this country, to the amount of many hundreds 
of millions of dollars, the great majority of which were 
purchased for a pittance. 

The great banking houses of New York City and 
Boston are the agents of the money lending classes of 
Great Britain, and are the mere echoes of Lombard 
street, London. 

Since the discovery of the enormously rich gold 
mines of Australia, which rivaled those of California, 
she ranks as one of the leading producers of gold, 
while the mines of the latter are giving indications of 

The production of silver in the British empire was 


comparatively small, while that of the United States 
was rapidly increasing in value. 

The amount of English capital invested in the 
national banking system is unknown, but is undoubt- 
edly very large, and it was the bankers of London who 
suggested the scheme of the present national banking 
law, as shown by the circular issued by James Hazard, 
of which mention was made in the second chapter of 
this work. 

It must be borne in mind that, from 1862 to 1873, 
United States Senator John Sherman was the Chairman 
of the Finance Committee of the national Senate, to 
which was referred, and which framed and moulded 
the various financial measures placed upon the statute 
books of the nation. He was the great predominating 
power in the financial legislation of Congress. 

In 1867, the great International Exposition at Paris 
was held, to which the nations of the world were 
invited by the Emperor of France. 

Secretary of State Seward, on behalf of the United 
States, appointed Samuel B. Ruggles as the commis- 
sioner to represent this country at that magnificent 

Napoleon III, the Emperor of France, on the 4th of 
January, 1867, extended an invitation to all the pow- 
ers, including the United States, to hold a conference 
in Paris, for the purpose of extending the principles of 
the Latin Union throughout the commercial world. 
This Union was originally formed December 23, 1865, 
by and between France, Italy, Greece, Belgium, and 
Switzerland, whereby these five nations agreed to 
establish for themselves jointly a system of common 
coinage, weights, and measures, as a means for the 
promotion of commerce. 


The monetary system adopted by the Latin Union 
provided for the free coinage of both gold and silver 
at a ratio of fifteen and one-half to one. 

It also made provision in its articles by which any 
other nation could become a member of the convention. 

Article 12 of the union was as follows; viz., — 

'*Any other nation can join the present convention 
by accepting its obligations and adopting the monetary 
system of the union in regard to gold and silver 
coins. ' ' 

The invitation of the French Emperor was accepted 
by the commercial nations of Europe and America, 
and Mr. Ruggles was appointed as the representative 
of the United States. 

Senator Sherman, who was the Chairman of the 
Committee on Finance of the Senate, on information of 
the receipt of the invitation of the Emperor, visited 
London in the spring of 1867, prior to the convening 
of this monetary conference. After consulting with 
the London bankers and capitalists, he hastened to 
Paris where the conference was to convene in the near 
future, and in reply to a note of Ruggles, sent a com- 
munication to that gentleman in which he advocated 
the adoption of a single gold standard. 

The material part of this remarkable letter to Mr. 
Ruggles is as follows : — 

"Hotel Jardin des Tuileries, May 18, 1867. 

"My Dear Sir: Your note of yesterday, inquiring 
whether Congress would probably, in future coinage, 
make our gold dollar conform in value to the gold 
5 -franc piece, has been received. 

"There has been so little discussion in Congress upon 
the subject that I cannot base my opinion upon any- 
thing said or done there. 



'*The subject has, however, excited the attention of 
several important commercial bodies in the United 
States, and the time is now so favorable that I feel 
quite sure that Congress will adopt any practical meas- 
ure that will secure to the commercial world a uniform 
standard of value and exchange. 

"The only question will be how this can be accom- 

"The treaty of December 23, 1865, between France, 
Italy, Belgium, and Switzerland, and the probable 
acquiescence in that treaty by Prussia, has laid the 
foundation for such a standard. 

"If Great Britain will reduce the value of her sover- 
eign 2 pence, and the United States will reduce the 
value of her dollar something over 3 cents, we then 
have a coinage in the franc, dollar, and sovereign 
easily computed, and which will readily pass in all 
countries ; the dollar as 5 francs, and the sovereign as 
25 francs. 

"This will put an end to the loss and intricacies of 
exchange and discount. 

"Our gold dollar is certainly as good a unit of value 
as the franc, and so the English think of their pound 
sterling. These coins are now exchangeable only at 
a considerable loss, and this exchange is a profit only 
to brokers and bankers. Surely each commercial 
nation should be willing to yield a little to secure a 
gold coin of equal value, weight, and diameter, from 
whatever mint it may have been issued. 

"As the gold 5 -franc piece is now in use by over 
60,000,000 of people of several different nationalities, 
and is of convenient form and size, it may well be 
adopted by other nations as the common standard of 
value ; leaving to each nation to regulate the divisions 
of this unit in silver coins or tokens. 

"If this is done France will surely abandon the 
impossible effort of making two standards of value. 
Gold coins will answer all the purposes of European 
commerce. A common gold standard will regulate 


silver coinage, of which the United States will furnish 
the greater part, especially for the Chinese trade. ' ' 

It will be seen from the statements volunteered by 
Mr. Sherman in his letter to Mr. Ruggles, that he was 
endeavoring to leave the impression upon this confer- 
ence, that the United States was in favor of a single 
standard of gold ; and that the effort of France in mak-' 
ing two standards of value was impossible ; and that a 
common gold standard would regulate silver coinage. 

The position assumed by Senator Sherman had 
immense influence, for at that time he held the most 
important position on the leading committee of the 
United State Senate. 

He spoke as one having authority, and gave his 
moral influence to that financial policy which has 
finally destroyed one-half of the money metals of the 

While in England Mr. Sherman was evidently ascer- 
taining the views of influential persons and bodies upon 
this proposed change of the coinage laws. We quote 
further from his letter to Mr. Ruggles in which he 
says : — 

"In England many persons of influence and differ- 
ent chambers are earnestly in favor of the proposed 
change in the coinage. The change is so slight with 
them that an enlightened self-interest will soon induce 
them to make it, especially if we make the greater 
change in our coinage. ' ' 

This letter is an important link in the chain of evi- 
dence that tends to prove a concerted plan on the part 
of British and American financiers to effect a momen- 
tous change in the coinage laws of the United States, 
a change that resulted in the demonetization of silver. 


Senator Sherman furnished the best of evidence, that, 
"Many persons of influence and different chambers" of 
a foreign country were taking deep interest in the 
coinage laws of a nation to which they owed no 

Mr. Sherman was a leading member of the United 
States Senate, and it is deducible from his writings 
that, after ascertaining the views of these ''influential 
persons and chambers" as to what system of coinage 
would be satisfactory to them, he immediately pro- 
ceeded to carry them into effect by introducing a bill 
to that end. 

The phrase, "Many persons of influence and different 
chambers," undoubtedly signifies the bankers and 
other fund holding classes of Great Britain, who were 
interested in securing legislation that would enhance 
the value of stocks and bonds. 

This letter of the Senator to Commissioner Ruggles 
is a voluntary confession from Mr. Sherman, that he 
was in London in conference with influential interests 
which were earnestly in favor of the proposed change 
in the standard of money. 

On the 30th of May, 1867, Mr. Ruggles transmitted 
a communication to Secretary of State Seward, in 
which he states that the letter of Senator Sherman 
urging the adoption of a single standard of gold was 
laid before the International Committee having the 
question of uniform coin under special examination. 

In this communication, Mr. Ruggles informs the 
Secretary of State of an interview held with Napoleon, 
with reference to the coinage of gold and silver, in the 
course of which the French emperor propounded the 
following significant question: "Can France do any-, 
thing more in aid of the work?" 


We here quote the reply of Mr. Ruggles to the ques- 
tion of the emperor in his own language; viz., — 

"To which it was replied, France can coin a piece of 
gold of twenty-five francs, to circulate side by side on 
terms of absolute equality with the half eagle of the 
United States and the sovereign, or pound sterling, of 
Great Britain, when reduced, as they readily might be, 
precisely to the value of twenty-five francs. The em- 
peror then asked, 'Will not a French coin of twenty- 
five francs impair the symmetry of the French decimal 
system?' To which it was answered, 'No more than it 
is affected, if at all, by the existing gold coin of five 
francs;' that it was only the silver coins of France 
which were of even metric weight, while every one of 
its gold coins, without exception, represented unequal 
fractions of the meter. 

"It was then stated to the Emperor that an eminent 
American statesman, ]Mr. Sherman, Senator from Ohio, 
Chairman of the Finance Committee of the Senate of 
the United States, and recently in Paris, had written 
an important and interesting letter, expressing his 
opinion that the gold dollar of the United States ought 
to be and readily might be reduced by Congress, in 
weight and value, to correspond with the gold 5 -franc 
piece of France; that the letter was now before 
the International Committee having the question of 
uniform coin under special examination, to which let- 
ter, as being one of the best interpretations of the 
views of the American people, the attention of the 
public authorities of France was respectfully invited. 
The emporer then closed the audience by repeating 
the assurances of his gratification that the important 
international measure in question was likely to receive 
active support from the United States. 

"The letter of Mr. Sherman, above referred to, 
dated the i8th of May, 1867, originally written in Eng- 
lish, was presented in a French translation a few days 
afterward to the International Committee in full ses- 
sion, where it was received with unusual interest and 


ordered by the committee to be printed in both lan- 
guages. A copy is herewith transmitted for the infor- 
mation of the Department of State. ' ' 

Upon a final vote in the conference, the influence of 
England and John Sherman succeeded in defeating 
the adoption of a bi-metallic standard, and a single 
standard of gold was agreed upon by the conference 
with but a single dissenting vote. Hence, it will be 
seen that John Sherman and Samuel B. Ruggles were 
the two eminent persons whose influence was exerted 
against the adoption of the sagacious policy of the 
Emperor of France, which had for its object an inter- 
national standard of both gold and silver at a ratio of 
fifteen and one-half to one. 

It is evident that Senator Sherman exerted his 
great influence in defeating international bi-metallism, 
the adoption of which would have resulted in untold 
benefits, not only to the United States, but to the 
world at large. 

As the first step for carrying into execution the 
scheme outlined in his Paris letter. Senator Sherman, 
during the second session of the Fortieth Congress, 
introduced Senate bill 217, entitled, "A bill in relation 
to coinage of gold and silver. ' ' 

The material parts of this proposed measure are 
contained in sections one, two , and three, which are 
as follows : — 

"Be it enacted by the Senate and House of Represen- 
tatives of the United States of America in Congress as- 
sembled. That, with a view to promote a uniform cur- 
rency among the nations, the weight of the gold coin of 
five dollars shall be 124-29^ troy grains, so that it shall 
agree with a French coin of twenty-five francs, and with 
the rate of thirty-one hundred francs to the kilogram ; 


and the other sizes or denominations shall be in due pro- 
portion of weight, and the fineness shall be nine-tenths 
or 900 parts fine in i,ooo. 

"Section 2. And be it further enacted, That, in order 
to conform the silver coinage to this rate and to the 
French valuation, the weight of the half dollar shall 
be 179 grains, equivalent to 116 decigrams; and the 
lesser coins be in due proportion, and the fineness shall 
be nine-tenths. But the coinage of silver pieces of one 
dollar, five cents, and three cents shall be discontinued. 

"Section 3. And be it further enacted. That the gold 
coins to be issued under this act shall be a legal tender 
in all payments to any amount ; and the silver coins 
shall be a legal tender to an amount not exceeding ten 
dollars in any one payment. ' ' 

The language of these sections expressly demonetizes 
the standard silver dollar of 412^ grains as the unit of 
account by omitting to provide for its coinage. 

The only silver coins that could be issued from the 
mints of the United States, should this bill become a 
law, would be the half dollar, the quarter dollar, and 
ten cent piece, which would be legal tender for the 
payment of debts to any amount not exceeding ten 
dollars in any one payment ; while gold coin would be 
unlimited legal tender to any amount. 

The bill was referred to the Finance Committee, of 
which Mr. Sherman was Chairman, and on the 9th of 
June, 1868, he reported it back favorably, and he advo- 
cated its passage in an elaborately written argument. 

He thus spoke of the system of coinage which the 
bill proposed to establish as follows : — 

"The second inquiry of your committee was whether 
the plan proposed by the Paris conference was the 
best mode to accomplish the end desired. 

It proposes : — 

I. A single standard exclusively of gold. 


2. Coins of equal weight and diameter. 

3. Of equal quality of fineness — nine-tenths fine. 

4. The weight of the present 5 -franc gold piece to 
be the unit. 

5. The coins of each nation to bear the names and 
emblems prepared by each, but to be legal tenders 
public and private in all. 

' ' The single standard of gold is an American idea, 
yielded reluctantly by France and other countries, where 
silver is the chief standard of value. The impossible 
attempt to maintain two standards of value has given 
rise to nearly all the debasement of coinage of the last 
two centuries. The relative market value of silver 
and gold varied like other commodities, and this led 
first to the demonetization of the more valuable metal, 
and second to the debasement or diminution of the 
quantity of that metal in a given coin. " 

This was the first effort ever attempted to fasten a 
single gold standard upon the American people, and 
the declaration of Senator Sherman that, "The single 
standard of gold is an American idea," was misleading, 
as he well knew at the time when he used this lan- 
guage in the report quoted. 

The single gold standard is of British origin, as the 
parliamentary acts of 181 6 and 1844 conclusively prove 
beyond any doubt whatever. 

Mr. Sherman also used the following language in 
that report : — 

** France, whose standard is adopted, makes a new 
coin similar to our half eagle. She yields to our de- 
mand for the sole standard of gold, and during the whole 
conference evinced the most earnest wish to secure 
the co-operation of the United States in the great 
object of unification of coinage." 

The report above quoted is proof positive, that Sen- 
ator Sherman and Mr. Ruggles had placed the United 
States m a false light before the Paris conference. 


The distinguished Senator avers that France yielded 
to *' Our demand for the sole standard of gold" — an 
astonishing piece of intelligence to his colleagues. 

For, be it remembered, Mr. Ruggles was a mere 
appointee of the President, and Congress had not, 
either by bill or resolution, authorized Mr. Ruggles to 
represent the United States at any monetary confer- 
ence whatever. 

The attitude of Mr. Ruggles on the proposed change 
of the coinage laws of the United States was purely 
voluntary, and, in fact, the views of this gentleman 
and Senator Sherman were distinctly repudiated by 
Congress at its earliest opportunity. 

The same committee, by Senator Morgan, of New 
York, submitted a minority report against the passage 
of the bill. We quote at length from this powerful 
document : — 

*'In June last, while the Universal Exposition was 
in progress, an international monetary conference was 
held in Paris under the presidency of the French min- 
ister of foreign affairs. 

"Delegates from the several European nations were 

"Mr. Samuel B. Ruggles represented the United 
States, and his report on the subject has been com- 
municated to Congress through the Department of 
State. From this it appears that a plan of monetary 
unification was there agreed upon, the general features 
of which are : 

**i. A single standard, exclusively of gold. 

**2. Coins of equal weight and diameter. 

"3. Of equal quality, nine-tenths fine. 

"4. The weight of the present 5-franc gold piece, to 
the unit, with its multiples. The issue by France of a 
new coin of value and weight of 25 francs was recom- 


"5. The coins of each nation to continue to bear the 
names and emblems preferred by each, but to be legal 
tenders, public and private, in all. 

"Senate bill 217 is designed to carry into effect this 
plan. Its passage would reduce the weight of our gold 
coin of $5, so as to agree with a French coin of 25 

"It determines that other sizes and denominations 
shall be in due proportion of weight and fineness, and 
that foreign gold coin, conformed to this basis, shall be 
a legal tender so long as the standard of weight and 
fineness are maintained. It requires that the value of 
gold coin shall be stated both in dollars and francs, and 
also in British terms, whenever Great Britain shall 
conform the pound sterling to the piece of $5. 

"It conforms our silver coinage to the French valu- 
ation, and discontinues the silver pieces of $1, 5, 
and 3 cents, and limits silver as a legal tender to pay- 
ments of $10. The ist of January, 1869, is fixed as the 
period for the act to take effect. 

"The reduction which this measure would effect in 
the present legal standard value of the gold coin of 
the United States would be at the rate of three and 
a half dollars to the hundred, and the reduction in 
the legal value of our silver coinage would be still 
more considerable. 

"A change in our national coinage so grave as that 
proposed by the bill should be made only after the 
most mature deliberation. The circulating medium 
is a matter that directly concerns the affairs of every- 
day life, affecting not only the varied, intricate and 
multiform interests of the people at home, to the mi- 
nutest detail, but the relations of the nation with all 
other countries as well. The United States has a 
peculiar interest in such a question. It is a principal 
producer of the precious metals, and its geographical 
position, most favorable in view of impending com- 
mercial changes, renders it wise that we should be in 
no haste to fetter ourselves by any new international 


regulation based on an order of things belonging es- 
sentially to the past. ' ' 

Further on in his report, the distinguished Senator, 
with rare power of fact and argument, exposes this 
new scheme of finance proposed to be fastened upon 
the American people by the bill introduced by Sher- 

He shows that the American continent produced 
four-fifths of the silver of commerce ; that the mines of 
Nevada have taken high rank ; and that Mexico alone 
supplied more than half of the world's grand total. 

He points out that silver money is the key to the 
commerce of the western hemisphere, and of the trade 
of China, Japan, India, and other Oriental countries. 

The Senator says: — 

"The American continent, too, produces four-fifths 
of the silver of commerce. The mines of Nevada have 
already taken high rank, and Mexico alone supplies 
more than half the world's grand total. Our relations 
with the silver-producing people, geographically most 
favorable, are otherwise intimate. 

"Manifestly our business intercourse with them can 
be largely increased, a fact especially true of Mexico, 
which, for well-known political reasons seeks the 
friendliest understanding. This must not be over- 

"These two streams of the precious metals, poured 
into the current of commerce in full volume, will pro- 
duce perturbations marked and important. Other 
countries will be affected, but the United States will 
feel the effect first and more directly than any other. 

"The Pacific railway will open to us the trade of 
China, Japan, India, and other Oriental countries, of 
whose prepossessions we must not lose sight. For 
years silver, for reasons not fully understood, has been 
the object of unusual demand among these Asiatic 
nations, and now forms the almost universal medium 


of circulation, absorbing rapidly the silver of coinage. 
The erroneous proportion fixed between silver and 
gold by France, and which we are asked to copy, is 
denuding that country of the former metal. Our own 
monetary system, though less faulty, is not suitably 
adjusted in this respect. The silver dollar, for 
instance, a favorite coin of the native Indian and dis- 
tant Asiatic, has well-nigh disappeared from domestic 
circulation, to reappear among the eastern peoples, 
with whom we more than ever seek close intimacy. 

"As they prefer this piece we do well to increase 
rather than discontinue its coinage, for we must not 
deprive ourselves of the advantages which its agency 
will afford, and 'it would be useless to send dollars to 
Asia inferior in weight and value to its well-known 
Spanish and American prototype. ' ' ' 

Mr. Ruggles says that nearly all the silver coined in 
the United States prior to 1858 has disappeared. A 
remedy is not to be found in the adoption of a system 
that undervalues this metal, for that commodity, like 
any other, shuns the market where not taken at its 
full value to find the more favorable one. 

It is a favorite metal, entering into all transactions 
of daily life, and deserves proper recognition in the 
monetary system. 

"It is said that 'To promote the intercourse of nations 
with each other, uniformity in weights, coins, and 
measures of capacity is among the most efficacious 
agencies. ' Our weights, coins, and measures now cor- 
respond much more nearly to the English than to the 
French standard. Our commerce with Great Britain 
is nine times greater than with France, and if the 
former does not adopt the Paris system of coinage — 
and we have no assurance that she will — the United 
States would certainly commit a serious error in pass- 
ing this bill. No argument is needed to enforce this. 
And what of the rising communities? A properly 
adjusted coinage would stimulate commerce with those 
great parts of the continent lying south and southwest 


of US, with the West Indies and the countless mil- 
lions of trans-Pacific countries. We stand midway on 
the thoroughfare of traffic between these two widely- 
separated races. Our railways, canals, our natural 
highways and merchant marine may be made to con- 
trol their carrying trade. 

"But here, as everywhere else, a well-adjusted 
coinage becomes a wand of power in the hand of en- 
terprise. Tokens are not wanting to mark the favor in 
which the United States are held by China. The 
unusual honor recently conferred by that government 
upon a citizen of this country was not alone because 
of his fitness as an ambassador at large, but was a 
mark as well of a friendly disposition toward this 
country. Future harmony of intercourse is assured, 
too, by their adoption as a text-book in diplomatic 
correspondence of a leading American authority on 
international law. Much might also be said about the 
growing partiality of Japan towards this countr}^ but 
it is enough that the recent opening of certain ports 
indicates an enlightened change in the politics of these 
two old empires, of which commerce, especially our 
own, is availing itself. ' ' 

This patriotic document pilloried the rascality of 
that scheme, which would destroy the immense mineral 
wealth of the western hemisphere by the destruction 
of silver money. 

Further on in the same report. Senator Morgan ex- 
poses the fallacy of this so-called international system 
of coinage embodied in the Sherman bill. The gen- 
uine Americanism of his nature is finely illustrated by 
the concluding language of that celebrated report. 

He continues : — 

"Our coinage is believed to be the simplest of any 
in circulation, and every way satisfactory for purposes 
of domestic commerce ; it possesses special merits of 
every-day value, and should not, for light reasons, be 


exchanged where the advantages sought to be gained 
are mainly theoretical, engaging more properly the 
attention of the philosopher than the practical man. 
The instincts of our people lead them to believe that 
we are on the eve of important business changes, and 
we may therefore safely hold fast for the present to 
what experience has proven to be good, following only 
where clear indications may lead, and a future of great 
prosperity opens to our country. 

"The war gave us self-assertion of character, and 
removed many impediments to progress ; it also proved 
our ability to originate means to ends. Its expensive 
lesson will be measurably lost if it fails to impress upon 
us the fact that we have a distinctive American policy 
to work out, one sufficiently free from the traditions of 
Europe to be suited to our peculiar situation and the 
genius of our enterprising countrymen. 

"The people of the United States have been quick 
to avail themselves of their natural advantages. Not 
only the public lands and the mines of precious 
metals, but our political institutions, have likewise 
powerfully operated in our favor, and will continue to 
do so with increasing force." — (Senate Report, Com. 
No. 117, 40th Congress, 2d Sess., Page 13.) 

Judging from the language of the report just quoted, 
the great Senator from the Empire state was a firm 
believer in the power of the American people to legis- 
late upon domestic financial questions without the aid 
or consent of foreign powers and potentates. 

Were he alive at the present day, how his indigna- 
tion would be aroused at the successive journeyings 
to England by American monetary commissioners, 
who have humiliated our national self-respect by get- 
ting down on their knees before the "Old Lady of 
Thread Needle Street," London, and begging for her 
assistance in the solution of our financial problems. 

The report of Senator Morgan was the death knell of 


the bill, and no attempt was made to bring it up again 
while Mr. Morgan was a member of the Senate. 

After the retirement of Mr. Morgan from the United 
States Senate, March 4, 1869, a revision of the mint 
laws was undertaken. 

Mr. Boutwell, Secretary of the Treasury, John J. 
Knox, Deputy Comptroller of the Currency, and Mr. 
Linderman, Director of the mint, all of whom were 
devoted adherents of the national banking system, 
and a single standard of gold, framed a bill containing 
seventy-one sections, the object of which was ostens- 
ibly a revision of the mint laws of the United States. 

On April 25, 1870, this bill, prepared by the Treas- 
ury clique, was transmitted by Secretary Boutwell to 
John Sherman, chairman of the Finance Committee, 
with a recommendation that it be adopted by Congress. 

Nowhere in the report of Secretary Boutwell, which 
accompanied this bill, was any mention made of any 
change in the system of coinage, but he called it, "A 
bill revising the laws relative to the mint, assay office, 
and coinage of the United States. ' ' 

This proposed measure, which purported to be a 
mere codification of the mint laws, in reality provided 
for the demonetization of the silver dollar. 

On the 28th of April, 1870, the bill was introduced 
into the United States Senate by Mr. Sherman, and 
was referred to the Committee on Finance. 

On December 19, 1870, it was reported back to the 
Senate with amendments. 

On January 9, 187 i, the bill came up in the Senate 
and was discussed in Committee of the Whole. 

That the reader may understand the process by 
which legislation can be surreptitiously pushed 


through Congress, it must be borne in mind that the 
various committees of the Senate and House of Repre- 
sentatives have immense power to control the passage 
of laws. 

A measure is introduced into either branch of Con- 
gress, it is referred to the appropriate committee which 
takes charge of the bill, considers it in all its phases, 
and makes a report for or against its passage. The 
report of the committee, in a majority of cases, is the 
foundation of the action of that branch where it was 
originally proposed. 

Therefore, it is the various committees of Congress 
which exert a powerful influence upon the fate of bills, 
as such reports are generally taken to be absolutely 
true by the members of that body. 

The bill as amended passed the Senate on the loth 
of January, 1871 ; and on the 13th of the same month 
it reached the House and was ordered to be printed. 

On February 25, 1871, Mr. Kelley, chairman of the 
Committee on Coinage, reported the bill back with an 
amendment, in the nature of a substitute, when it was 
again printed and re-committed. 

The bill was never heard of at that session and it 
never was debated in the House for a single moment. 

On March 9, 1871, Mr. Kelley introduced a bill in 
the Forty-second Congress, when it was ordered to be 
printed, and referred to the Committee on Coinage 
when appointed. 

On January 9, 1872, the bill was reported by Mr. 
Kelley, chairman of the Coinage Committee, with the 
recommendation that it pass. 

In the report made by Mr. Kelley to the House, the 
general objects of the bill were pointed out by him. 


He informed the House that it had been prepared in 
the Treasury Department for the purpose of codifying^ 
and simplifying the mint laws. He stated to the 
House that the most important change made by the 
bill was that creating a Director of the mint, with head- 
quarters in the Treasury Department. Mr. Maynard, a 
member of the Committee on Coinage, made the fol- 
lowing statement of the scope of the bill ; viz. : — 

*'This bill is symmetrical in all its parts; it is a 
mere revision of the mint laws, suggested by the Sec- 
retary of the Treasury, and concurred in by every man 
who sees the difficulty of managing mints and assay 
offices, scattered over this country as they are, without 
having a responsible head. Its sole function is to so 
codify the laws, and to appoint a responsible head imder 
the Secretary of the Treasury. ' ' 

On the loth of January, 1872, the House resumed 
consideration of the bill, and it was finally re -com- 
mitted to the Committee on Coinage, Weights, and Meas- 
ures for a report. The committee reported the bill to 
the House on April 9, 1872. 

Mr. Hooper, of Massachusetts, who was in charge of 
the bill, made a lengthy explanation of its provisions, 
and the only allusion made by him with reference to 
the silver dollar is the following ; viz. : — 

"Section 16 re-enacts the provisions of existing laws 
defining the silver coins and their weights, respectively, 
except in relation to the silver dollar, which is reduced 
in weight from 412^ to 384 grains; thus making it a 
subsidiary coin in harmony with the silver coins of less 
denomination, to secure its current circulation with 
them. The silver dollar of 412 >^ grains, by reason of 
its bullion and intrinsic value being greater than its 
nominal value, long since ceased to be a coin of cir- 
culation, and is melted by manufacturers of silverware. 
It does not circulate now in commercial transactions 


with any country, and the convenience of those manu- 
facturers in this respect can better be met by supplying 
"^mall stamped bars of the same standard, avoiding the 
useless expense of coining the dollar for that purpose. 
The coinage of the half dime is discontinued, for the 
reason that its place is supplied by the copper-nickel 
5-cent piece, of which a large issue has been made, 
and which, iDy the provisions of the act authorizing its 
issue, is redeemable in United States currency." — 
(See Cong. Globe, Part 3, Page 2,306, 2d Sess., 42d 

Mr. Hooper correctly stated the weight and fineness 
of the dollar contained in the bill pending, and as it 
finally passed the House, but he does not state that it 
was a legal tender for only five dollars. From the 
tenor of his remarks and the character of his argument, 
it could have been justly inferred that the purpose of 
this bill was to reduce the weight of the silver dollar 
so that it would circulate on a parity with that of gold, 
as at this time the value of the silver dollar exceeded 
that of gold by a fraction over three per cent. 

During the debate on the bill, Hon. Clarkson N. 
Potter, member of Congress from New York, opposed 
its passage in a speech of great length. 

The speech of Mr. Potter excited a very warm con- 
troversy, and those who were urging the passage of the 
bill, seeing the determined and aggressive opposition 
brought to bear against it, professedly abandoned it, 
and brought in a substitute which they asserted was 
entirely free from the objections brought against the 
original measure. 

On the 27th of May, 1872, Mr. Hooper obtained the 
floor and made a statement as follows ; viz. : — 

''I desire to call up the bill (H. R., No. 1,427) revis- 
ing and amending the laws relative to mints, assay 


offices, and coinage of the United States. I do so for 
the purpose of offering an amendment to the bill in 
the nature of a substitute, one which has been very 
carfully prepared, and which I have submitted to the 
different gentlemen in this House who have taken a 
special interest in the bill. I find that it meets with 
universal approbation in the form in which I offer it. 
I move that the rules be suspended and that the sub- 
stitute be put on its passage." 

Mr. Brooks: I ask the gentleman from Massachu- 
setts [Mr. Hooper] to postpone his motion until his 
colleague on the committee, my colleague from New 
York [Mr. Potter] is in his seat. 

Mr. Hooper, of Massachusetts: It is so late in the 
session that I must decline waiting any longer. 

Mr. Brooks: I would again suggest to the gentle- 
man that he should wait until my colleague comes in. 

Mr. Hooper, of Massachusetts: I cannot do so. 

Mr. Holman : I suppose that it is intended to have 
the bill read before it is put on its passage. 

The Speaker: The substitute will be read. 

Mr. Hooper, of Massachusetts: I hope not. It is 
a long bill, and those who are interested in it are per- 
fectly familiar with its pro\'isions. 

Mr. Kerr : The rules can not be suspended so as to 
dispense with the reading of the bill? 

The Speaker: They can be. 

Mr, Kerr : I want the House to understand that it 
is attempted to put through this bill without being 

The Speaker: Does the gentleman from Massachu- 
setts [Mr. Hooper] move that the reading of the bill 
be dispensed with? 

Mr. Hooper of Massachusetts: I will so frame my 
motion to suspend the rules that it will dispense wuth 
the reading of the bill. 

The Speaker : The gentleman from Massachusetts 
moves that the rules be suspended and that the bill 
pass, the reading thereof being dispensed with. 


Mr. Randall: Can not we have a division of that 

The Speaker: A motion to suspend the rules can- 
not be divided. 

Mr. Randall : I should like to have the bill read, 
although I am willing that the rules shall be sus- 
pended as to the passage of the bill. 

The question was put on suspending the rules and 
passing the bill without reading; and (two- thirds not 
voting in favor thereof) the rules were not suspended. 

The Congressional Record from which he have quoted 
is proof that it was a cunning move on the part of Mr. 
Hooper to push a measure through the House during 
the closing hours of its session, and that he sought to 
do this during the temporary absence of those mem- 
bers who were aware of his plan, and who were op- 
posed to the consummation of the scheme. This 
unscrupulous tool of the money power did not even 
want this bill read so that its contents would become 
known, as that would defeat its passage. 

In this dilemma, Mr. Speaker Blaine came to the 
rescue of Mr. Hooper, and suggested to the latter that 
he move the suspension of the rules, so that the bill 
could be passed without reading. 

The suggestion of Speaker Blaine was promptly 
acted on by Mr. Hooper, but the motion to suspend 
the rules and pass the bill without reading failed for 
want of a two-thirds vote. 

Mr. Hooper thereupon moved that the substitute be 
read, that the rules be suspended and the bill passed, 
which action had been prompted by Speaker' Blaine. 

We give the proceedings of the House verbatim ; viz. : 

Mr. Hooper, of Massachusetts: I now move that 
the rules be suspended, and the substitute for the bill 


in relation to mints and coinage passed ; and I ask that 
the substitute be read. 

The clerk began to read the substitute. 

Mr. Brooks: Is that the original bill? 

The Speaker : The motion of the gentleman from 
Massachusetts [Mr. Hooper] applies to the substitute, 
and that on which the House is called to act is being 

Mr. Brooks: As there is to be no debate, the only- 
chance we have to know what we are doing is to have 
both the bill and the substitute read. 

The Speaker: The motion of the gentleman from 
Massachusetts being to suspend the rules and pass the 
substitute, it gives no choice between the two bills. 
The House must either pass the substitute or none. 

Mr. Brooks : How can we choose between the orig- 
inal bill and the substitute unless we hear them both 

The Speaker: The gentleman can vote *'aye" or 
'*no" on this question whether this substitute shall 
be passed. 

Mr. Brooks : I am very much in the habit of voting 
"no" when I do not know what is going on. 

Mr. Holman : Before the question is taken up on 
suspending the rules and passing the bill, I hope the 
gentleman from Massachusetts will explain the lead- 
ing changes made by this bill in the existing law, es- 
pecially in reference to the coinage. It would seem 
that all the small coinage of the country is intended 
to be recoined. 

Mr. Hooper of Massachusetts : This bill makes no 
changes in the existing law in that regard. It does 
not require the recoinage of the small coins. ' ' — (Cong. 
Globe, Part 5, Page 3,883, 2d Sess., 42d Congress.) 

The question being taken upon the motion of Mr. 
Hooper, the rules were suspended by an aye and nay 
vote and the bill passed. 

The scheme was forced through the House by the 


downright falsehoods of Samuel Hooper, a banker of 
Boston, aided by the trickery and the manipulation of 
parliamentary rules by Mr. Speaker Blaine. 

The facts in the case were, that the provisions of the 
original bill abandoned by Mr. Hooper, and those of 
the substitute afterward passed, were practically the 

The bill was now transmitted to the Senate where it 
went into the hands of the Finance Committee, which, 
on December i6, 1872, reported the bill back with 

On January 7, 1873, additional amendments were 
reported which were ordered to be printed with the 

Section 16 of the substitute passed by the House was 
in the following language, viz. : — 

"That the silver coins of the United States shall be 
a dollar, a half dollar or 50-cent piece, a quarter dol- 
lar or 25-cent piece, and a dime or lo-cent piece ; and the 
weight of the dollar shall be 384 grains; the half dollar, 
quarter dollar, and the dime shall be, respectively, one- 
half, one-quarter and one- tenth of the weight of said dol- 
lar, which coins shall be a legal tender, at their nominal 
value, for any amount not exceeding five dollars in 
any one payment." 

This section of the substitute was identical with 
that of the original bill which was withdrawn by Mr. 
Hooper; and it will be seen that silver was demone- 
tized by its provisions, by which the free and unlimited 
coinage thereof was taken away from that metal, and 
its legal tender debt paying power limited to the 
insignificant sum of five dollars for any one payment. 

Section 1 5 of the substitute passed by the House was 
stricken out by the Finance Committee of the Senate 



in the way of amendment. When the question on the 
amendment striking out section 15 was before the 
Senate it was agreed to by that body. The next amend- 
ment was to strike out the word seventeen in the 17th 
section of the substitute, and this amendment made 
section 17 of the substitute, read 16 of the bill as 
amended by the Senate. 

The number of each succeeding section was changed 

The several sections of the substitute were taken up 
in their changed numeral order until section 19 of the 
substitute as passed by the House was reached, which, 
by the striking out of section 15 of said substitute, 
became section 18 of the amended Senate bill. 

This latter section provided for the inscription and 
mottoes to be impressed upon the coins to be issued 
under this bill. 

A debate arose upon this question, and Senator Cas- 
serly, of California, called attention to the omission of 
the eagle upon the gold dollar, three dollar gold piece, 
the silver dollar, half dollar and quarter dollar. 

Senator Sherman gave the following explanation; 
viz. : — 

Mr. Sherman: "If the Senator will allow me, he 
will see that the preceding section provides for coin 
which is exactly interchangeable with the English 
shilling and the 5-franc piece of France; that is, a 5- 
franc piece of France will be the exact equivalent of a 
dollar of the United States in our silver coinage ; and in 
order to show this wherever our silver coin shall float — 
and we are providing that it shall float all over the world 
— we propose to stamp upon it, instead of our eagle, 
which foreigners may not understand, and which they 
may not distinguish from a buzzard or some other bird, 
the intrinsic fineness and weight of the coin. " — (Cong. 


Globe, Part i, Page 672, 3d Sess., 426. Congress, 

This public declaration of Senator Sherman, in reply- 
to the question of Senator Casserly, is one of the 
mysteries of this transaction. He had charge of this 
bill, and the Congressional Globe shows that what after- 
ward became section 15 of the bill as amended by the 
Senate was never read nor acted upon by that body. 

The French 5 -franc piece, about which Mr. Sher- 
man spoke in his reply to Senator Casserly, was the 
equivalent of a silver dollar containing 384 grains of 
silver, mentioned in section 16 of the substitute, now 
section 15 of the amended bill before the Senate. 

In 1874, upon the discovery of the demonetization of 
silver, said section 15 of the amended Senate bill, 
which was now the law, was ascertained to read as 
follows : — 

"The silver coins of the United States shall be a 
trade dollar, a half dollar, or 50-cent piece, a quarter 
dollar, or 25-cent piece, a dime, or lo-cent piece; and 
the weight of the trade dollar shall be 420 grains troy; 
the weight of the half dollar shall be 12 grams and 
one-half of a gram ; the quarter dollar and the dime 
shall be, respectively, one-half and one-fifth of the 
weight of said half dollar ; and said coins shall be a legal 
tender at their nominal value for any amount not 
exceeding five dollars in any one payment. ' * 

That this section of the coinage law, providing for 
the mintage of a trade dollar containing 420 grains of 
silver, was not in the bill when the debate arose upon 
the inscriptions and mottoes designed to be placed 
upon the coins provided for by this act, is evident 
from the answer made by Sherman to the inquiry of 
Mr. Casserly; for the reason that the debate arose 
over section 18 of the amended bill, while the pro vi- 


sion for the coinage of silver was embraced in the pre- 
ceding- section 15 of the amended act. Said section 
15 was formerly 16 of Mr. Hooper's substitute. 

The parliamentary procedure in the consideration 
of bills in both Houses of Congress is to read each sec- 
tion separately, take a vote upon its passage, and thus 
act upon each section consecutively. 

The bill so amended went to the House of Repre- 
sentatives for its concurrence in the Senate amend- 

Speaker Blaine appointed Messrs. Hooper and 
Stoughton as the Committee of Conference on the part 
of the House; Senators Sherman, Scott, and Bayard, 
three of the most radical single gold standard men in 
Congress, were appointed conferees on the part of the 

The Conference Committees met, and, with the excep- 
tion of a few trifling amendments, agreed to the pro- 
visions of the bill as it came from the Senate. They 
made their reports to their respective Houses, and the 
bill became a law on the 12th of February, 1873. 

We now come to a singular act on the part of Sher- 
man when the bill came up for final passage in the 

During his career as chairman of the Finance Commit- 
tee of the Senate, we have seen him in the city of Lon- 
don, in 1867, next he appears at Paris in the same year, 
and throws his influence in behalf of the single stand- 
ard of gold, then he introduces a bill in Congress in 
1868 for the demonetization of silver. Afterward, dur- 
ing the year 1870, he brings forward the bill framed by 
Secretary Boutwell, of which mention has been made 
heretofore. He reports bill after bill for the adoption 


of a single standard of gold, and now he votes against 
the act of February 12, 1873, which was finally the 
fruition of his efforts. 

This incomprehensible action is the strangest episode 
in the long public career of the Great Demonetizer, and 
many explanations have been volunteered for this 
apparently inconsistent conduct. 

In a speech in the United States Senate, Mr. Sher- 
man attempted the following explanation of his course 
which led to the demonetization of the silver dollar, 
he says: — 

"The old silver dollar was dropped out, in the re- 
vision, and why? Simply because it was not in use. 
No law repealed the silver dollar; it was simply 
dropped out — there was no such coin in use. It could 
not circulate because, in 1872 and 1873, the silver dollar 
was worth more than the gold dollar. As it had not 
been coined for twenty years it was dropped out from 
among the coins of the United States. ' ' 

With his consistent and usual disregard of facts, 
Senator Sherman avers that no silver dollars had been 
coined for the period of twenty years prior to the de- 
monetization act of February 12, 1873. This state- 
ment was made in the face of the official report of the 
director of the United States mint for the year 1873, 
in which it is shown that 1,117,136 standard silver dol- 
lars were coined in the calendar year of 187 1, that 
1,118,600 were coined in the year 1872, and in the one 
month and twelve days from January i, 1873, to Feb- 
ruary 12, 1873, 296,000 of standard silver dollars were 

The excuse tendered by Mr. Sherman for the pass- 
age of the act of February 12, 1873, is that the silver 
dollar was worth more than the gold dollar. The sil- 


ver dollar so ''dropped out" contained 412^ grains of 
silver. Now, if the reasons stated by Mr. Sherman for 
the omission of the coinage of the silver dollar by that 
act were valid and controlled his action, why did the 
honorable Senator amend that act in committee by 
increasing the number of grains in the silver dollar to 
420, thus making its bullion value greater than before 
the passage of this act? 

His strange logic is as follows : First, prior to its 
demonetization, the silver dollar was more valuable 
than that of gold, hence it would not circulate ; there- 
fore, as a remedy to increase its circulation, the value 
of the bullion in the silver dollar must be made 

■ In other words, the silver dollar was worth three 
and one-fourth cents more than that of gold and the 
former was hoarded or sold abroad; therefore, to 
obviate this difficulty in the way of increasing the cir- 
culation of that dollar, the weight was increased from 
412^ to 420 grains, and its overvaluation from three 
and one-fourth cents to five cents. 

With such sophistry as the above, Mr. Sherman 
sought to delude the American people. 

The manner in which the act of February 12, 1873, 
was slipped through both Houses of Congress has 
excited endless controversies which rage even to this 

Senator Sherman, in his speech of August 30, 1893, 
made a labored defense of his conduct during the pass- 
age of the bill demonetizing silver. He asserts that 
the measure was fully and thoroughly debated, but 
the Congressional Globe of that period conclusively 
proves that such was not the fact. 


On the other hand, many Senators and Representa- 
tives of long service in Congress, including the sessions 
of 1870-71-72-73, renowned for their ability and integ- 
rity, have declared time and again that false statements 
were made by those having charge of the bill, that 
these statements were relied on by the various mem- 
bers, and that those who voted for the measure never 
knew or even suspected that silver would be demone- 
tized by its passage. 

The public men making these statements bear such 
high reputation for truth and integrity, that their tes- 
timony does not require the sanction of an oath to 
carry conviction. 

One exceedingly strong circumstance that adds great 
weight to the charge of fraud in the passage of the act 
of February 12, 1873, ^i^s in the fact that Senators 
Nye and Stewart, who represented the state of 
Nevada— the greatest silver producing territory in 
America — voted in favor of the bill. 

Will any sane person suppose that these two Sena- 
tors would knowingly vote for a measure which would 
ruin the immensely rich silver mines of that state that 
had honored them by an election to the United States 

It is preposterous. 

The following statements of leading members of 
Congress furnish a solution to this memorable contro- 

Mr. Holman, in a speech delivered in the House of 
Representatives July 13, 1876, said, with reference to 
the act of February 12, 1873: — 

**I have before me the record of the proceedings of 
this House on the passage of that measure, a record 


which no man can read without being convinced that 
the measure and the method of its passage through 
this House was a 'colossal swindle.' I assert that the 
measure never had the sanction of this House, and it 
does not possess the moral force of law." — (Cong. 
Record, Vol. IV, Part 6, Appendix, Page 193, ist Sess., 
44th Congress.) 

This is the statement of a man renowned as the 
"Watch Dog of the Treasury," and whose vigilance 
during his long career in Congress has saved the nation 
hundreds of millions of dollars. 

Mr. Birchard, a republican member of Congress 
from Illinois, in a speech in the House on July 13, 
1876, said: — 

"The coinage act of 1873, unaccompanied by any 
written report upon the subject from any committee, 
and unknown to the members of Congress, who with- 
out opposition allowed it to pass under the belief, if 
not assurance, that it made no alteration in the value 
of the current coins, changed the unit of value from 
silver to gold." — (Same Cong. Record, Page 4,560.) 

Mr. Cannon, a republican member of Congress from 
the same state, in a speech on July 13, 1876, said: — 

"This legislation was had in the Forty-second Con- 
gress, February 12, 1873, by a bill to regulate the mints 
of the United States, and practically abolish silver as 
money by failing to provide for the coinage of the sil- 
ver dollar. It was not discussed, as shown by the 
Record, and neither members of Congress nor the peo- 
ple understood the scope of the legislation." — (Same 
Cong. Record, Appendix, Page 197.) 

Again on August 5, 1876, Mr. Holman in speaking 
of that bill said : — 

"The original bill was simply a bill to organize a 
Bureau of mines and coinage. The bill which finally 


passed the House and which ultimately became a law 
was certainly not read in this House." 

On the same day in the course of the same speech 
he said: — 

*'It was never considered before the House as it was 
passed. Up to the time the bill came before this 
House for final passage the measure had simply been 
one to establish a bureau of mines ; I believe I use the 
term correctly now. It came from the Committee 
on Coinage, Weights, and Measures. The substitute 
which finally became a law was never read, and is sub- 
ject to the charge made against it by the gentleman 
from Missouri [Mr. Bland], that it was passed by the 
House without a knowledge of its provisions, especially 
upon that of coinage. 

"I myvSelf asked the question of Mr. Hooper, who 
stood near where I am now standing, whether it 
changed the law in regard to coinage. And the 
answer of Mr. Hooper certainly left the impression 
upon the whole House that the subject of coinage was 
not affected by that bill. "—(Cong. Record, Vol. IV, 
Part 6, Page 5,237, ist Sess., 44th Congress.) 

Mr. Bright, of Tennessee, said of this law : — 

**It passed by fraud in the House, never having been 
printed in advance, being a substitute for the printed 
bill; never having been read at the Clerk's desk, the 
reading having been dispensed with by an impression 
that the bill made no material alteration in the coin- 
age laws; it was passed without discussion, debate 
being cut off by operation of the previous question. 
It was passed to my certain information, under such 
circumstances that the fraud escaped the attention of 
some of the most watchful as well as the ablest states- 
men in Congress at that time. '. . . Aye, sir, it was a 
fraud that smells to heaven. It was a fraud that will 
stink in the nose of posterity, and for which some per- 
sons must give account in the day of retribution." — 
(Cong. Record, Vol. VII, Part i, Page 584, 26. Sess. 
45th Congress.) 


Senator Allison, on February 15, 1878, when House 
bill 1,093, to authorize the free coinage of the stand- 
ard silver dollar, and to restore its legal tender char- 
acter was under consideration, stated : — 

"But when the secret history of this bill of 1873 
comes to be told, it will disclose the fact that the 
House of Representatives intended to coin both gold 
and silver, and intended to place both metals upon the 
French relation instead of on our own, which was the 
true scientific position with reference to this subject in 
1873, but that the bill afterward was doctored, if I 
may use that term, and I use it in no offensive sense 
of course — " 

Mr. Sargent interrupted him and asked him what he 
meant by the word "doctored." 

Mr. Allison said: — 

"I said I used the word in no offensive sense. It 
was changed after discussion, and the dollar of 420 
grains was substituted for it. ' ' — (Cong. Record, Vol. 
VII, Part 2, Page 1,058, 2d Sess. 45th Congress.) 

General Garfield, in a speech made at Springfield, 
Ohio, during the fall of 1877, said: — 

"Perhaps I ought to be ashamed to say so, but it is 
the truth to say that, I at that time being Chairman of 
the Committee on Appropriations, and having my 
hands overfull during all that time with work, I never 
read the bill. I took it upon the faith of a prominent 
democrat and a prominent republican, and I do not 
know that I voted at all. There was no call of the 
yeas and nays, and nobody opposed that bill that I 
know of. It was put through as dozens of bills are, as 
my friend and I know, in Congress, on the faith of the 
report of the chairman of the committee ; therefore I 
tell you, because it is the truth, that I have no knowl- 
edge about it."— (Cong. Record, Vol. VII, Part i, 
Page 989, 2d Sess., 45th Congress.) 

Senator Howe, in a speech delivered in the Senate 
on February 5, 1878, said: — 


"Mr. President, I do not regard the demonetization 
of silver as an attempt to wrench from the people more 
than they agree to pay. That is not the crime of which 
I accuse the act of 1873. I charge it with guilt com- 
pared with which the robbery of two hundred millions 
is venial. " — (Cong. Record, Vol. VII, Part i. Page 754, 
2d Sess., 45th Congress.) 

Senator Thurman, on the 15th of February, 1878, in 
debate said: — 

"I can not say what took place in the House, but 
know when the bill was pending in the Senate we 
thought it was simply a bill to reform the mint, regu- 
late coinage, and fix up one thing and another, and 
there is not a single man in the Senate, I think, 
unless a member of the committee from which the 
bill came, who had the slightest idea*^ that it was even 
a squint toward demonetization. ' ' — (Cong. Record, 
Vol. VII, Part 2, Page 1,064, 2d Sess., 45th Congress.) 

Mr. Kelley, a republican member of Congress from 
Pennsylvania, in a speech delivered in the House in 
1879, in speaking of the act of February 12,1873, said : — 

"All I can say is that the Committee on Coinage, 
Weights, and Measures, who reported the original bill, 
were faithful and able, and scanned its provisions 
closely; that as their organ I reported it; that it con- 
tained provision for both the standard silver dollar and 
the trade dollar. Never having heard until a long 
time after its enactment into law of the substitution in 
the Senate of the section which dropped the standard 
dollar, I profess to know nothing of its history; but 
I am prepared to say that in all the legislation of this 
country there is no mystery equal to the demonetiza- 
tion of the standard silver dollar of the United States. 
I have never found a man who could tell just how it 
came about or why." — (Cong. Record, Vol. IX, Part i. 
Page 1,231, ist Sess., 46th Congress.) 

President Grant was also ignorant of the demoneti^a- 


tion of silver. Eight months after the passage of the 
bill, he wrote a letter to Mr. Cowdrey, from which the 
following extract is taken : — 

"The panic has brought greenbacks about to a par 
with silver. I wonder that silver is not already com- 
ing into the market to supply the deficiency in the cir- 
culating medium. When it does come, and I predict 
that it will soon, we will have made a rapid stride 
toward specie payments. Currency will never go 
below silver after that. The circulation of silver will 
have other beneficial effects. Experience has proved 
that it takes about forty millions of fractional currency 
to make small change necessary for the transaction of 
the business of the country. Silver will gradually 
take the place of this currency, and, further, will be- 
come the standard of values which will be hoarded in 
a small way. I estimate that this will consume from 
two to three hundred millions, in time, of this species 
of our circulating medium. 

"It will leave the paper currency free to perform the 
legitimate functions of trade and will tend to bring us 
back where we must come at last, to a specie basis. 
I confess to a desire to see a limited hoarding of 
money. It insures a firm foundation in time of need. 
But I want to see the hoarding of something that 
has a standard of value the world over. Silver has this, 
and if we once get back to that our strides toward a 
higher appreciation of our currency will be rapid. Our 
mines are now producing almost unlimited amounts of 
silver, and it is becoming a question, *What shall we 
do with it?' I suggest here a solution that will answer 
for some years, and suggest to you bankers whether 
you may not imitate it : To put it in circulation now ; 
keep it there until it is fixed, and then we will find 
other markets." — (McPherson's Hand Book of Politics 
for 1874, Pages 134-135.) 

It has been charged time and again, that Ernest 
Seyd, the emissary of the London money power, was 



in this country at the time of the demonetization of 
silver, and that he used the vast sum of $500,000 with 
which to corrupt Congress and to secure its demoneti- 

On the 30th of August, 1893, Senator Sherman, in a 
speech urging the repeal of the purchasing clause of 
the Sherman Law of July 14, 1890, took occasion to 
severely denounce the charge as utterly false. 

But as evidence that some mysterious influence was 
brought to bear upon certain members of Congress, 
we produce the following language taken from the 
report upon the bill which demonetized silver. This 
report was written by Mr. Hooper who was in charge 
of that bill, and who was so persistent in engineering 
its passage through the Forty-Second Congress. That 
report contains the following statement ; viz. : — 

*'The bill was prepared two years ago, and has been 
submitted to careful and deliberate examination. It 
has the approval of nearly all the mint experts of the 
country and the sanction of the Secretary of the Treas- 
ury. Ernest Seyd, of London, a distinguished writer 
and bullionist, is now here, and has given great atten- 
tion to the subject of mints and coinage, and after 
examining the first draft of the bill made various 
sensible suggestions, which the committee accepted 
and embodied in the bill. While the committee take 
no credit to themselves for the original preparation of 
this bill, they have no hesitation in unanimously recom- 
mending its passage as necessary and expedient." 

Here is a direct admission that Ernest Seyd, a citi- 
zen of England, was in this country at the time that 
the first steps were taken in the drafting of that bill 
which aimed at the striking down of the time-honored 
silver dollar, and the passage of which meant the 
destruction of the valuable silver mines of the United 


States, together with those of Mexico and South 

Mr. Seyd was not here merely as a spectator, as the 
language of Mr. Hooper shows, for he says that this 
Englishman, "After examining the first draft of the 
bill made various sensible suggestions, which the com- 
mittee accepted and embodied in the bill." 

It will strike the average American citizen >as singu- 
lar that public men of the prominence of Samuel 
Hooper and John Sherman, members of the National 
Congress, should submit a great measure of such im- 
portance as this bill to the inspection and for the cor- 
rection of its provisions by an alien who owed allegi- 
ance to Great Britain. 

It is a remarkable coincidence that foreign nations, 
especially England, should exert such influence in the 
preparation and enactment of financial measures that 
came solely within the constitutional powers of an 
American Congress. 

These striking coincidences of the constant meetings 
and consultations of Senator Sherman with the finan- 
ciers of Great Britain, from the time of his visit to 
London, in 1867, down to the passage of that infamous 
act demonetizing silver, were not the results of mere 

It has been affirmed, time and again, by the ablest 
Senators and Representatives of Congress, statesmen 
of unblemished honor, that the demonetization of silver 
in 1873 was the premeditated act of the combined 
money power of England and America. 

This charge of a deeply laid and successful con- 
spiracy has been openly and fearlessly made in the 
halls of Congress, and has not been met and over- 


thrown The Congressional Records, published by 
authority of Congress, affords ample justification for 
this statement. 

It is a historical fact that the financiers of Great 
Britain were mainly influential in procuring that great 
change in the coinage laws of this country, and Sen- 
ator Sherman, who introduced the first bill providing 
for the d!emonetization of silver, and who ever since 
1873 has exerted his immense prestige and influence 
against every measure providing for its restoration, in 
whole or in part, gives most conclusive evidence that 
such was the case. 

To support this statement, we quote from his speech 
delivered before the Chamber of Commerce, of New 
York City, March 6, 1876, in which he made an elab- 
orate argument against the resolution of that body in 
favor of repealing the Resumption Act of 1875. 

In the course of his remarks, adverse to that course 
of the Chamber of Commerce, he said : — 

*'Our coinage act came into operation on the ist of 
April, 1873, and constituted the gold one dollar piece 
the sole unit of value, while it restricted the legal ten- 
der of the new trade dollar and the half dollar and 
subdivisions to an amount not exceeding five dollars in 
one payment. 

Thus the double standard previously existing was 
finally abolished, and the United States as usual was 
influenced by Great Britain in making gold coin the 
only standard. This suits England, but does not suit 
us. I think with our large silver producing capacity 
we should return to the double standard, at least in 
part, and this will constitute one of the means by 
which we will be enabled to resume specie payments." 
— (Cong. Globe, Vol. IV, Part 2, Page 1,481, ist Sess., 
44th Congress.) 


Is this not a plain admission by the chairman of the 
Finance Committee of the United States Senate, that 
Great Britain had wielded a great influence in procur- 
ing the demonetization of silver in 1873? 

In connection with this deliberate public admission 
of Senator Sherman, let it be borne in mind that Sam- 
uel Hooper stated on the floor of the House of Repre- 
sentatives, that a citizen of England assisted in 
framing the bill which demonetized silver. 

This speech of Senator Sherman was clothed with 
official authority, and he distinctly stated that, *'The 
double standard previously existing was finally abol- 
ished, and the United States as usual was influenced 
by Great Britain in making gold coin the only standard. 
This suits England, but does not suit us. " 

In his elaborate address to the leading commercial 
body of America, Mr. Sherman avers that British in- 
fluence was successful in securing legislation from an 
American Congress favorable to that country, and that 
"This suits England but does not suit us. " This is 
equivalent to a charge of treason against Congress and 
the President, and implies corruption ; for what Amer- 
ican law-maker, however base, would voluntarily pros- 
titute his power to the influence of a foreign state? 

He makes an implied charge against the patriotism 
of that party of which he is a leader, for it held the 
presidency and a great majority of both Houses of the 
Federal legislature at the time the act which demon- 
etized silver was placed upon the statute books. And 
nowhere during the debates upon that measure does he 
denounce those whom he alleges voted a bill through 
Congress to "suit England;" nowhere had he censured 
those who were influenced by Great Britain. The 


query naturally presents itself — Did Great Britain influ- 
ence Sherman to present the bill of June 9, 1868, which 
sought to demonetize silver? Was that to suit Eng- 

Mr. Sherman knew whereof he spoke. It will be 
remembered that the first bill introduced in Congress 
to demonetize silver was that of the 9th of June, 1868, 
and it came fresh from the hands of Mr. Sherman. 

Furthermore in his report advocating the passage of 
this bill, Mr. Sherman stated that "The single standard 
of gold is an American idea. " 

In his address to the Chamber of Commerce he 
asserts that the United States was influenced by Great 
Britain in adopting the single standard of gold. 

No living man can reconcile the utterly inconsistent 
statements of this alleged statesman. 

It was during this period, beginning with the year 
1862 down to the year 1873, that so many gigantic scan- 
dals smirched the legislative record of Congress. 

During the time covered by these years, the Fed- 
eral legislature gave away more than 200,000,000 acres 
of the public domain to great railway corporations, in 
addition to a gratuity of United States bonds to the 
amount of $65,000,000; the Credit Mobilier rascality 
resulted from an exposure of the corruption of many 
distinguished members of Congress who sold their votes 
outright ; the great whisky ring was all-powerful, and, 
in collusion with the treasury officials and revenue offi- 
cers, swindled the government out of untold millions; 
the President, it is true, ordered Secretary Bristow "To 
let no guilty man escape, ' ' and then he nullifled all pros- 
ecutions of the scoundrels by the exercise of his pardon- 
ing power; Boss Shepherd reigned supreme at Wash- 


.ington; the ''Salary Grab" and "Back Pay" schemes 
of plunder were brazenly pushed through Congress, 
while the Freedman's Bureau robbed the negro of his 

It would require pages to briefly summarize the his- 
tory of the congressional and departmental scandals 
rife at the national capital. 

The Washington correspondent of that leading re- 
publican journal, the Chicago Tribune, of the date of 
February 21, 1873, thus described the corruption prev- 
alent at Washington. He says: "Turkish corruption 
under the pashas and beys, or Russian official rotten- 
ness, could scarcely be worse than it is here. ' ' 

The public conscience was so aroused by these ex- 
posures and proofs of the boundless official corruption 
and debauchery, that, in the congressional elections 
of 1874, the republican party met with an overwhelm- 
ing defeat, aud the democracy carried the House of 
Representatives by a great majority. 

Immediately after the demonetization of silver by the 
United States, Norway, Sweden, and Denmark closed 
their mints to silver and adopted the gold standard. 

The Latin Union, however, still continued the 
unlimited coinage of silver for a brief period. 

On September 6, 1873, the French government 
limited the amount of silver to be accepted at the mints 
for coinage. 

To afford the reader an explanation of the closing of 
the mints to silver by France, we refer to the great 
Franco- Prussian war of 1870-71, brought on by the 
folly of Emperor Napoleon, who, to restore his waning 
influence over the French nation, declared war against 
Prussia, July 15, 1870. 


In the brief period of two hundred and ten days, the 
armies of France were destroyed; her territory was 
over-run by the victorious Germans, and the nation 
lay prostrate under the heel of her bitterest enemy — 
Prince Bismarck. 

In the treaty of peace negotiated by Theirs on behalf 
of France, and Bismarck, on the part of Germany, the 
latter succeeded in imposing the most enormous bur- 
dens upon the French people. 

The treaty of peace as finally agreed upon by France 
and Germany provided that the former should pay the 
latter the immense sum of 5,000,000,000 francs ($1,000,- 
000,000), in gold as an indemnity for the expense of 
the war, payable in three installments, the last of 
which would fall due March i, 1875. 

In the meantime the French authorities were to 
support a German army of occupation until the money 
was paid. 

Not satisfied with the exaction of this enormous in- 
demnity, Bismarck compelled the French to cede to 
the German empire the two splendid provinces of 
Alsace and Lorraine. 

It is said that the venerable and patriotic Theirs 
shed bitter tears when he signed this treaty, and that 
Bismarck smiled in derision at the humiliation of the 

Up to the time of this treaty the German empire 
was on a silver basis, but, upon the payment of this 
enormous war indemnity, Bismarck, in the execution of 
his policy to cripple France as much as lay in his 
power, procured the passage of a law through the Ger- 
man parliament which provided for the demonetiza- 
tion of silver. 


This measure became a law July 9, 1873, ^^^ i^ es- 
tablished a national gold standard throughout Ger- 
many, and it further provided that the aggregate issue 
of silver coin should not, until further orders, exceed 
ten marks {$2.50), for each inhabitant of the empire, 
and that the silver in excess of this amount should be 
withdrawn from circulation and sold. 

The evident object of this measure was the enhance- 
ment of the value of the vast war indemnity re- 
ceived from France, and, by throwing a large amount 
of non-legal tender silver on the market, to force down 
its price, which, in effect, would depreciate the silver 
coinage of France and the other members of the Latin 
union, whose mints still remained open to the free 
and unlimited coinage of silver at a ratio of fifteen and 
one-half to one. 

The shrewd statesmen of France at once penetrated 
the scheme of the wily Bismarck to debase the French 
coinage, and, therefore, on the 6th of September, 1873, 
the French government in a treasury order limited the 
amount of silver to be accepted by the mints. 

In February, 1874, the Latin union states jointly 
closed their mints to the free coinage of silver, agree- 
ing, however, to coin on government account such quan- 
tities as were fixed upon from time to time. 

Such were the reasons that moved France to suspend 
the unlimited coinage of silver. 

During the years of 1868, 1869, 1870, 187 1, 1872, and 
1873, the production of silver in the United States 
rapidly increased, while that of gold largely diminished. 

In the last named year the production of silver 
reached the great sum of $35,750,000, the use of which 
as money was destroyed by the act of February 12, 


Shortly after the demonetization of silver in the 
United States, a distinguished political economist of 
Europe urged this country to readopt the bi-metallic 
law, and he forcibly stated that it would, "Not only 
save the world at large from an abyss, and prevent the 
accomplishment of a stupid general crime, whose 
authors humanity would some day learn to curse, but 
that she would advance her own material interests 
more than may be supposed possible, and that she may 
perchance take the lead in the intelligent and prudent 
organization of firm monetary systems. ' ' 

The destructive effects of the demonetizing act of 
1873 upon the value of property was so great, that Hon. 
Alexander Stephens, one ot the ablest and most con- 
servative of American statesmen, declared that it was 
more disastrous to the American people than the total 
cost and destruction of that bloody and protracted war 
between the North and the South. He said: — 

"A careful calculator told me the other day that 
shrinkage of values in this country after the fatal act 
was more than the whole expense of our war. That 
fatality was worse than war. There is no remedy for 
us now except in re-establishing the value of silver 
and its free coinage. We want $900,000,000 in circula- 
tion, at least.- We have now only fourteen dollars 
per capita in circulation, including all the hoarded 
gold and silver. We want at least twenty-five 
dollars per capita, or as much as we had 
before the crash of 1873. People fear the silver flood; 
I would let it come from all the world until we have a 
thousand millions in circulation. ' * 

The enormity of this crime, as stated by Mr. Steph- 
ens, can only be adequately gauged when it is borne 
in mind that the cost of the war of the Rebellion up to 
the time that he made that statement aggregated 


The process by which the value of bonds and of 
public debts was increased by legislation, both here 
and in Europe, and the value of other property was 
correspondingly depreciated, as measured by the ex- 
change power of money, was shown by a paper read 
before the Society of Arts of London, by J. Barr Rob- 
ertson, the value of which was so highly recognized by 
the United States government, that it was published 
on page 354 of the coinage laws of the United States, 

Mr. Robertson says: — 

"While it would take too much space to enter into 
details regarding the practical effects of this apprecia- 
tion of gold, it will suffice to give some indication of 
the enormous injury it has inflicted, if it is stated that 
the transfer of wealth from the landed and propertied 
classes and from the mercantile, manufacturing, and 
producing classes generally in the United Kingdom to 
the holders of securities, mortgages, annuities, etc., 
can not be less than ;^2, 000, 000, 000, due solely to the 
appreciation of gold. 

"It is already a question how much further the hold- 
ers of securities are to receive the assistance of a con- 
tinually contracting currency to enable them to go on 
absorbing further and further the wealth of the pro- 
ducing classes. If no other relief can be obtained, it 
may be necessary to fix a commodity standard instead 
of a money standard for long-dated payments, as has 
been recommended by the principal economists of the 
last hundred years. Such a colossal unearned incre- 
ment as has accrued to the holders of securities valued 
in gold during the last twenty years in Europe and the 
United States, amounting to not less than from ;£7,ooo,- 
000,000 to ^9,000,000,000, is entirely unparalleled in 
the history of the world, and all other public questions 
sink into utter insignificance compared with it. ' ' 

Think of it ! The demonetization of silver by the 
United States and Europe so enhanced the exchange 


value of gold over other forms of property that it added 
$10,000,000,000 to the wealth of the creditor classes of 
England; and from $35,000,000,000 to $45,000,000,000 
to the accumulations of the creditor classes of Europe 
and the United States. 

In speaking of the effects of the demonetization of 
silver, initiated in England by Lord Liverpool in 181 6, 
later followed by the United States and Germany, and 
in describing the artificial increase of the value of 
money over all other species of property, and in point- 
ing out the class who are the sole beneficiaries of that 
infamous system. Sir Moreton Frewen well said: — 

*'It may, indeed, be affirmed without fear of contra- 
diction, the legislation arranged in the interest of a cer- 
tain class, first by Lord Liverpool in this country, and 
again by Sir Robert Peel at the instigation of Mr. 
Jones Loyd and other wealthy bankers, which was 
supplemented recently by simultaneous anti-silver legis- 
lation in Berlin and Washington at the instance of the 
great financial houses. This legislation has about 
doubled the burden of all national debts by an arti- 
ficial enhancement of the value of money. 

"The fall of all prices induced by this cause has been 
on such a scale that while in twenty years the national 
debt of the United States quoted in dollars has been 
reduced by nearly two-thirds, yet the value of the 
remaining one-third, measured in wheat, in bar iron, 
or bales of cotton, is considerably greater, is a greater 
demand on the labor and industry of the nation than 
was the whole debt at the time it was contracted. 

"The aggravation of the burdens of taxation induced 
by this so-called "appreciation of gold, " which is no 
natural appreciation, but has been brought about 
by class legislation to increase the value of gold which 
is in few hands, requires but to be explained to 
an enfranchised democracy, which will know how to 
protect itself against further attempts to contract the 


currency and force down prices to the confusion of 
every existing contract. 

''Of all classes of middle-men, bankers have been by 
far the most successful in intercepting and appropriat- 
ing an undue share of produced wealth. While the 
modern system of banking and credit may be said to 
be even yet in its infancy, that portion of the assets of 
the community which is to-day in the strong boxes of 
the bankers, would, if declared, be an astounding rev- 
elation of the recent profits of this particular business ; 
and not only has the business itself become a most 
profitable monopoly, but its interests in a very few 
hands are diametrically opposed to the interests of the 
majority. By legislation intended to contract the cur- 
rency and force down all prices, including wages, the 
price paid for labor, the money owner has been able to 
increase the purchase power of his sovereign or dollar 
by the direct diminution of the price of every kind of 
property measured in money. ' ' 



''According to my viev^s of the subject, the conspiracy 
which seems to have been formed here and in Europe, 
to destroy by legislation and otherwise, from three- 
sevenths to one-half, of the metallic money of the 
world, is the most gigantic crime of this or any other 
age." — John G. Carlisle, in 1878. 

''It is the monometallists who are the authors of the 
depreciation which they point to as a proof of the un- 
worthiness of the metal they cry down. They re- 
semble the people who, having tied the legs of a horse, 
call out for him to be killed because he does not gal- 
lop. " — Henri Cernushi. 

In the preceding chapter, the writer faithfully en- 
deavored to give a true history of the legislation cul- 
minating in the act of February 12, 1873, which 
struck down the standard silver dollar as the unit of 

Step by step, the money power successfully attained 
its great end in the halls of Congress, and, with the 
downfall of silver, nothing apparently stood in its way 
for the complete control of the currency of the nation, 
and consequently an oppressive mastery over all other 

The financial legislation, up to this period, was dic- 
tated by the national banks and their firm allies, the 
money lenders of London. 

Congress merely registered the demands of this 
money power upon the statute books as the law of the 



Since April i, 1873, we have ascertained that a single 
standard of gold was fastened upon the nation by the 
combined influence of England and her all}^ — the 
national banking system. 

The passage of the so-called specie resumption act 
of 1875 planted this country upon a gold standard, and 
practically gave the banks a monopoly of the currency. 

This was the policy planned and matured by the 
money power to place the vast business interests of the 
nation upon a bank credit basis as the sole method of 
carrying on all trade and commerce. 

The way was apparently clear to substitute a national 
bank credit currency in lieu of legal tender silver and 
greenbacks, force all business to be tributary to the 
banks, and to perpetuate a huge national debt. 

This system of finance was the exact counterpart of 
that of England — in fact, it was borrowed from that 

That the scheme of finance embodied in the national 
banking act was imported from England by John Sher- 
man — the author of the original bill providing for its 
creation — is indisputable. 

In one of his reports as Secretary of the Treasury, 
Mr. Sherman refers to this fact and says: "Both Eng- 
land and the United States have settled upon a bank 
currency secured by government bonds." 

This language of Mr. Sherman, in thus speaking of 
England and the United States, signifies a unity of 
purpose to fasten on this country the British system. 

To illustrate the immense power of the Bank of Eng- 
land over the people of Great Britain, we quote from 
a report made by the Chamber of Commerce of the city 
of Manchester, England, in 1859, which says: — 


''Although it scarcely comes within the scope of their 
present object, the board will add a reflection upon the 
subject of the undue privileges assumed by the Bank 
of England. That such a power over the property and 
even over the lives of the people of this country can be 
allowed to exist is one of the phenomena of our civil- 
ization. That their directors, twenty-six in number, 
can in secret session, without the consent of their con- 
stituents, decide the value of all property, is to be 
regarded as one of the greatest crimes against modern 

In the face of this indictment against the Bank of 
England, Mr. Sherman appropriated its plan as the 
model of his scheme — the national banking act of 
February 25, 1863. 

After the demonetization of silver in 1873, the most 
disastrous panic ever known in history up to that time, 
swept over this country, tens of thousands of failures 
occurred, entailing losses of hundreds of millions of 
dollars of capital. 

The extent of the loss wrought by that great crash 
cannot be described by the language of man. Resource 
must be had to figures to convey an adequate idea of 
the magnitude of the disaster flowing from this wide 
spread ruin and wreckage of values. 

In 1873, the number of failures was 5, 183, with liabil- 
ities of $228,500,000; in 1874, the failures were 5,830, 
and the liabilities, $155,239,000; in 1875 the failures 
were 7,740, and liabilities of $201,000,000; in 1876, the 
number of failures was 9,092 with a loss of $191,000,- 
000; in 1877, the failures were 8,872 and liabilities were 
$190,669,000; in 1878, the failures reached 10,478 with 
the vast aggregate of $234,383,000 in liabilities — a total 
of failures numbering 45, 195, with liabilities of $1, 1 10,- 


906,000 — exceeding the enormous war indemnity paid 
by France to Germany. 

Exclusive of this immense loss to business, the 
amount of suffering borne by the people will never be 
known to the historian. 

Hundreds of thousands of skilled and unskilled work- 
men were thrown out of employment, although the 
crops were abundant, and the number of consumers 
was larger than ever before known. 

Then, for the first time in the history of the United 
States, appeared that phenomenon — the American 
tramp — whose appearance and permanency, as an 
established institution in civil society, is a problem that 
must be solved some time in the near future. 

Then occurred an universal reduction of wages in all 
the leading industries throughout the United States, 
and in many cases skilled workmen received a wage of 
less than one dollar per day. Hundreds of thousands 
of American citizens, the flower of the industrial class, 
struck against these starvation wages, and these strikes 
spread all over the United States, resulting in tumults, 
riots, and bloodshed, assuming the proportions of a 
civil war. 

The United States troops were called out to put 
down the workingmen at the point of the bayonet, and 
their just grievances were quenched by the regular 

It was during this period that a celebrated divine, 
in a sermon delivered from his pulpit, said : — 

"Is not a dollar a day enough to buy bread? Water 

costs nothing ! And a man who cannot live on bread 

is not fit to live. A family may live, laugh, love, and 

be happy, that eats bread in the morning with good 



water, and good water and bread at noon, and water 
and bread at night. ' ' 

This humane discourse was uttered by a minister of 
the gospel who received the princely salary of $25,000 
per annum. 

Jay Gould, the great railroad wrecker, said: "We 
shall shortly find ourselves living under a monarchy. 
I would give a million dollars to see Grant in the 
white house. ' ' 

The New York Times, a republican journal, said: — 

''There seems to be but one remedy, and it must 
come — a change of ownership of the soil and the crea- 
tion of a class of land-owners on the one hand and of 
tenant farmers on the other — something similar to 
what long existed in the older countries of Europe." 

Hon. J. C. Burrows, a republican member of Con- 
gress from Michigan, gave utterance to the following 
language in a speech delivered by him on the question 
of finance : — 

"To-day, the best that could happen to the financial 
interests and the business interests would be for Con- 
gress to pass a law, at its very next session, to punish 
with death any member of Congress that would make a 
speech on finance for the next twenty years. What 
we want is to be let alone, and we are on the high road 
to prosperity. ' ' 

Rev. Joseph Cook, of Boston, a divine and public 
lecturer, used this remarkable language in a speech 
delivered by him : — 

"The strongest of this generation wants a dictator. 
I say come on with your schemes of confiscation and 
forced loans, and graded income taxes, and irredeem- 
able currency, under universal suffrage, and if you are 
sufficiently frank in proclaiming the doctrines of your 
ringleaders, then, under military necessity, and even 
here in the United States, we must get rid of universal 


suffrage, and we shall. Rather than allow these 
things we will have one of the fiercest of civil wars. ' * 

The Nevada Chronicle, the organ of the millionaire 
Senator Sharon, editorially said: — 

"We need a stronger government. The wealth of 
the country demands it. Without capital and capital- 
ists our government would not be worth a fig. The 
capital of the country demands protection ; its rights 
are as sacred as the rights of the paupers who are con- 
tinually prating of the encroachments of capital and 
against centralization. We have tried Grant, and we 
know him to be a man for the place above all others. 
He has nerve. As President he would be commander- 
in-chief of the army and nav}% and when the com- 
munistic tramps of the country raise mobs to tear up 
railroad tracks, and to sack cities on the sham cry of 
'bread or blood,' he would not hesitate to turn loose 
upon them canister and grape. The wealth of the 
country has to bear the burden of government and it 
should control it. The people are becoming educated 
up to this theory rapidly, and the sooner the theory is 
recognized in the constitution and laws, the better it 
will be for the people. Without blood, and rivers of 
it, there will be no political change of administration. 
The moneyed interests, for self-preservation, must sus- 
tain the republican party. The railroads, the banks, 
and the manufacturers, the heavy importers, and all 
classes of business in which millions are invested, will 
sustain the supremacy of the republican party. 

"To avert fearful bloodshed, a strong central govern- 
ment should be established as soon as possible. ' ' 

These are but a few of the many expressions of the 
sentiments entertained by a corrupt and subsidized 
press, clerical hypocrites, and gigantic knaves. 

United States Senator Sharon was one of the most 
notorious corruptionists and libertines that ever dis- 
graced the name of man. Statesmen and financiers of 


the Stamp of Gould and Sharon are libels on the human 
race, and their influence was a standing menace against 
the liberties of the people. 

This panic hung over the people like a pall for seven 
long years. The extent of the suffering throughout 
the duration of this panic is eloquently expressed by 
Colonel Ingersoll, who said: — 

"No man can imagine, all the languages of the 
world can not express what the people of the United 
States suffered from 1873 to 1879. Men who consid- 
ered themselves millionaires found that they were 
beggars; men living in palaces, supposing they had 
enough to give sunshine to the winter of their age, 
supposing that they had enough to have all they loved 
in affluence and comfort, suddenly found that they 
were mendicants with bonds, stocks, mortgages, all 
turned to ashes in their hands. The chimneys grew 
cold, the fires in furnaces went out, the poor families 
were turned adrift, and the highways of the United 
States were crowded with tramps. ' ' 

Of course the wise men of that day, in their conceit, 
discovered a reason for the panic of 1873. In their 
learned dissertations on the origin of this financial 
breakdown, they asserted that over production was the 
moving cause that so fearfully multiplied failures, threw 
workmen out of employment, and made hundreds of 
thousands of men, women, and children feel the pangs 
of hunger and starvation. 

The reasoning of these financial wiseacres took the 
form of the following syllogism: Panics, want and 
starvation are results of the production of large quan- 
tities of wheat, corn, and other agri cultured products ; 
prior to 1873 and several years after that date the 
American people produced immense crops of farm 
products; therefore, these immense crops were the 


cause of panics, bankruptcies, loss of employment, 
hunger, and starvation. Such was the theory gravely 
announced by so-called learned professors of political 

This doctrine was taken up and echoed in the halls 
of Congress by alleged statesmen, reiterated in the 
press, and formed the burden of the stump speeches of 
designing politicians who sought political preferment. 
This absurd, sophistical argument had some weight 
with the unthinking. Ordinarily, instances of such 
suffering that were prevalent during the panic of 1873, 
usually proceeded from failures of crops. 

It is a historical fact that all great panics that had 
occurred in the United States up to this time, were 
during periods when nature exerted herself to the 
utmost to make bounteous provision for the wants of 

The scarcity of money, the want and suffering be- 
came so great that, in 1876, the Chamber of Commerce 
of New York City adopted a resolution urging the 
immediate repeal of the specie Resumption Act of Jan- 
uary 24, 1875. 

It was on this occasion that John Sherman met with 
this body, and gave utterance to the statement quoted 
in the preceding chapter that, "The United States as 
usual was influenced by Great Britain in making gold 
coin the standard. This suits England but it does not 
suit us." 

One great cause of the panic originating in 1873, was 
the natural result of that financial policy, which had 
persisted in a long continued contraction of the cur- 
rency, a policy initiated by Hon. Hugh McCulloch, 
who had been appointed Secretary of the Treasury in 


Upon his appointment as the head of the Treasury 
Department, he at once took measures, in pursuance of 
the various acts of Congress, to fund the currency of 
the nation into interest-bearing bonds, and to create a 
permanent public debt. 

Under the act of April 12, 1866, the Secretary of the 
Treasury was authorized to exchange interest-bearing 
bonds for the notes circulating as money, whether 
said notes were interest-bearing or otherwise. 

Secretary McCulloch, a national banker by profes- 
sion, proceeded to carry out this policy of a merciless 
contraction of the currency to the full extent of his 

At the time he began this policy of funding the cur- 
rency into long time interest-bearing bonds, the entire 
volume of the various notes performing the functions 
of money amounted to the sum of $1,983,000,000, ex- 
clusive of gold and silver coin. This volume of cur- 
rency consisted of greenbacks, temporary loan certifi- 
cates, one and two-year treasury notes, certificates of 
indebtedness, postal currency, compound interest treas- 
ury notes, fractional currency, 7-30 notes of August 
and September, 1864, 7-30 notes of 1864-65, state 
bank circulation, and national bank notes. 

The two classes of 7-30 treasury notes alone amounted 
to $845,553,000. 

It has been denied that these treasury notes cir- 
culated as money, but General Logan and numerous 
other public men of that day, declared that these notes 
formed a very material part of the volume of currency. 

With this large volume of circulation the national 
banking money power saw that it was impossible to 
obtain controf of the currency of the nation. 


Money being plentiful, business was transacted on a 
cash basis, and, therefore, the people were not com- 
pelled to borrow the circulating notes of the national 
banks at a high rate of interest, and thus be placed in 
the power of these banks. 

These conditions were so apparent, that, in his 
report as Secretary of the Treasury for the year 1865, 
Mr. McCulloch said: — 

''The country as a whole, notwithstanding the ravages 
of war and the draught upon labor, is by its greatly 
developed resources, far in advance of what it was in 
1857. The people are now comparatively free from 

Hence it was the policy of the national banking 
money power, by this funding of the ready cash of the 
country into bonds, and substituting the national bank 
circulation for the currency issued by the government, 
to control the business of the nation, and ultimately 
the votes of the people who were obligated to the 
banks as borrowers. 

The national banks desired that all business should 
be done upon credit ; that this credit should be given 
to them by the government in the form of national 
bank notes, the latter form of currency to be loaned by 
the banks to the business interest of the country. 

Secretary McCulloch carried out this policy so ener- 
getically, and contracted the volume of legal tender 
currency so rapidly, that strong protests went up from 
the people, and, on the 3d of February, 1868, Congress 
forbade the further destruction of the legal tenders, 
which had been reduced to $346,000,000. The total 
contraction of all forms of notes circulating as money, 
reached the enormous sum of §1,000,000,000, during 
the administration of Mr. McCulloch. We include in 


these last figures, all government obligations utilized 
as money by the people, whether legal tender or other- 

In a speech delivered in the Senate in 1874, General 
Logan stated that the contraction of the volume of 
money up to that time was more than one billion 

It was this murderous policy of contraction, initiated 
by Secretary McCulloch and followed by his successors, 
that eventually led to the panic of 1873, from which 
dates a universal stagnation of business lasting seven 
long years. 

During this panic, the democracy was successful in 
the elections of 1874, and for the first time since i860, 
the Lower House was controlled by the party of Jeffer- 
son and Jackson. 

It was then ascertained that silver had been demon- 
etized by the act of February 12, 1873, and the House 
at once endeavored to enact meastires to undo the 

During the Forty-fourth Congress, which came into 
existence March 4, 1875, ^^^ continued in power until 
the 4th of March, 1877, the President was republican. 
In the Senate there were 46 republicans, 29 democrats, 
and one vacancy. The House of Representatives was 
composed of 186 democrats and 107 republicans. 

This Congress convened on the 6th of December, 


On March 27, 1876, the Committee on Appropriations 
brought forward House bill 2,450, which appropriated 
money for a deficiency for the Bureau of engraving and 
printing, and section 2 provided for the issue of sub- 
sidiary silver. 


Mr. Reagan, of Texas, offered an amendment mak- 
ing the trade dollar legal tender for any amount not 
exceeding fifty dollars, and the silver coins less than 
one dollar for any amount not exceeding twenty-five 
dollars. This was agreed to. Yeas 124 — 99 demo- 
crats, 22 republicans, i independent; nays 94 — 28 
democrats, 65 republicans, i independent. As amend- 
ed the bill passed. Yeas 122 — 50 democrats, 70 re- 
publicans, and 2 independents; nays 100 — 80 dem- 
ocrats, 18 republicans, and 2 independents. 

The bill was transmitted to the Senate, and it was 
referred to the Finance Committee, of which Mr. Sher- 
man was chairman. 

On April 10, 1876, Mr. Sherman, from the Finance 
Committee, reported the bill with amendments; one 
amending section 3 so as to authorize the coinage of a 
silver dollar of 412.8 grains — a legal tender not exceed- 
ing twenty dollars in any one payment except for cus- 
toms, dues, and interests on public debt, and stopped 
the coinage of trade dollars. Another — a new section 
4 — authorized the exchange of silver dollars for an equal 
amount of United States notes to be retired, canceled, 
and not reissued ; and also for coining silver bullion at 
its market value. The amended bill thus reported by 
Senator Sherman, authorized the coinage of a silver 
dollar of 412.8 grains, which, while it would increase 
its legal tender debt-paying power from five dollars to 
twenty dollars, could not be received for custom dues, 
and could not be utilized for the payment of interest 
on the public debt. 

These silver dollars were to be exchanged for an 
equal amount of United States notes, which were thus 
to be permanently retired from circulation. 


The propositions of the amended bill, as reported by- 
Senator Sherman, should it become a law, would not 
increase the volume of money a single dollar, for the 
reason that the silver dollar would be solely used to 
retire an equal amount of legal tender currency. 

The most vicious part of the amended bill was that 
which limited the legal tender debt-paying power of 
the silver dollar to twenty dollars; the legal tender 
currency, for which the silver dollars were to be sub- 
stituted, was an unlimited legal tender, except for 
duties on imports and interest on the public debt. 

Therefore, the adoption of this measure would be 
the substitution of a limited legal tender silver dollar 
for a full legal tender currency, leaving gold the sole 
unlimited legal tender for the payment of all debts, 
public and private, including duties on imports and 
interest on the public debt. 

The amended bill was discussed in the Senate, and, 
on motion of Mr. Sherman, sections 3 and 4 of the 
amended bill were stricken out, and that motion carried 
out of the bill the House amendment offered by Mr. 
Reagan which proposed to make trade dollars legal 
tender to the amount of fifty dollars, which, by the act 
of February 12, 1873, were limited to five dollars for 
any one payment. 

By this parliamentary device with the House bill, 
Mr. Sherman succeeded in killing that measure, the 
passage of which would have conferred an enlarged 
debt-paying power on the trade dollar. 

On June 10, 1876, Mr. S. S. Cox, from the Committee 
on Banking and Currency, reported a joint resolution 
to issue the silver coins in the Treasury to an amount 
not exceeding $10,000,000 in exchange for an equal 


amount of legal tender notes, to be kept as a special 
fund, to be reissued only upon the retirement of frac- 
tional currency ; which was passed without a division. 

June 21, 1876, in the Senate, the House joint resolu- 
tion was amended by adding a section prohibiting the 
coinage of the trade dollar except for export trade ; 
thus striking down the trade dollar, the only dollar 
authorized by the coinage law of 1873. 

Again, the fine Italian hand of the money power was 
visible in the Senate amendment to this joint resolution. 

On June 10, 1876, Mr. Cox, from the Committee on 
Banking and Currency, reported a resolution in three 
sections, providing for an increased coinage of silver. 
It was passed without division, and was transmitted to 
the Senate. 

In the Senate June 27, 1876, the bill was considered 
on the report of the Finance Committee to strike out all 
after the enacting clause and insert four new sections. 
This was a substitute proposed by the Senate Com- 
mittee on Finance, headed by the distinguished senior 
Senator from Ohio. 

Section i provided for the coinage of silver dollars 
of 412.8 grains, to be legal tender for sums not ex- 
ceeding twenty dollars. 

Section 2 provided for exchanging such dollars and 
minor coins for legal tenders to be canceled and not 
reissued or replaced. 

Section 3 provided for purchasing silver bullion at 
market rates for such coinage, to be made without loss 
in coinage and issue. 

Section 4, prohibiting legal tender of the trade dollar 
and limiting its coinage to export demand. This was 
before the law of July 22, 1876, had been enacted^. 


Again the scheme to substitute a limited legal tender 
silver dollar for United States notes and treasury notes 
was brought forward in these amendments. 

The continued efforts of the Senate to retire perma- 
nently the government legal tender notes were a part 
of the plan of the national banking money power to 
force the business of the country to be transacted by 
a credit money. 

This bill also aimed at the coinage of silver on gov- 
ernment account alone, hence, should the silver so 
coined out of the bullion purchased by the government 
decline in bullion value as compared with gold, the 
national banking money power would demand that the 
silver dollar be redeemed in gold. It furthermore took 
away all legal tender debt-paying power of the trade 
dollar, and limited its coinage to export demand. 

On June 28, 1876, Senator Bogy moved to amend 
section i of the Senate bill by striking out the words 
* ' Not exceeding twenty dollars, ' ' the effect of which 
would be to make the silver dollar a full legal tender 
for the payment of all debts. The amendment was 
agreed to by a vote of 18 to 14. 

On June 29, 1876, the bill as amended was recom- 
mitted to the Finance Committee, where it slept the 
sleep that knows no waking. 

On July 19, 1876, in the House of Representatives, 
Mr. Bland, from the Committee on Mines and Mining, 
reported resolution 3,635, authorizing the free coinage 
of gold and silver. This resolution was carried over 
to the next session of Congress, and, on December 13, 
1876, Mr. Bland offered a substitute for the resolution 
of July 19, 1876, which provided for the free and un- 
limited coinage of the silver dollar of 412^ grains, 
with full legal tender power. 


This substitute, which restored silver to the position 
it occupied prior to 1873, was passed by a vote of 168 
yeas to 53 nays. It was sent to the republican Sen- 
ate, referred to the Finance Committee where it was 
smothered by John Sherman. 

On August 15, 1876, a joint resolution was adopted 
by Congress which provided for the creation of a 
Monetary Commission, "To consist of three Senators, 
to be appointed by the Senate, three members of the 
House of Representatives, to be appointed by the Speak- 
er, and experts not exceeding three in number, to be 
selected by and associated with them." Congress 
instructed the commission to make an examination 
into the money question, and to give its opinion as to 
"The best means for providing for facilitating the 
resumption of specie payments. ' ' 

On March 2, 1877, the commission made its report, 
or more strictly speaking, several reports. The 
majority report signed by five of its members, gave a 
history of the bi-metallic laws in force previous to 
1873, together with their effects on the value of com- 
modities, trade, and commerce, and, as its conclusion, 
advocated an immediate return to the bi-metallic stand- 
ard of sixteen to one. 

In speaking of the effect of the volume of money on 
values, and the baleful influences of falling prices on 
society, the majority report says: — 

"At the Christian era the metallic money of the 
Roman empire amounted to §1,800,000,000. By the 
end of the fifteenth century it had shrunk to less than 
$200,000,000. During this period a most extraordinary 
and baleful change took place in the condition of the 
world. Population dwindled, and commerce, arts, 
wealth, and freedom all disappeared. The people were 


reduced by poverty and misery to the most degraded 
conditions of serfdom and slavery. The disintegra- 
tion of society was almost complete. The conditions 
of life were so hard that individual selfishness was the 
only thing consistent with the instinct of self-preserva- 
tion. All public spirit, all generous emotions, all the 
noble aspirations of man shriveled and disappeared as 
the volume of money shrunk and as prices fell. 

"History records no such disastrous transition as that 
from the Roman empire to the dark ages. Various 
explanations have been given of this entire breaking 
down of the framework of society, but it was certainly 
coincident with the shrinkage in the volume of money, 
which was also without historical parallel. The crumb- 
ling of institutions kept even step and pace with the 
shrinkage in the stock of money and the falling of 
prices. All other attendant circumstances than these 
last have occurred in other historical periods unaccom- 
panied and unfollowed by any such mighty disasters. 
It is a suggestive coincidence that the first glimmer of 
light only came with the invention of bills of exchange 
and paper substitutes, through which the scanty stock 
of the precious metals was increased in efficiency. 
But not less than the energizing influence of Potosi and 
all the argosies of treasure from the new world were 
needed to arouse the old world from its comatose sleep, 
to quicken the torpid limbs of industry, and to plume 
the leaden wings of commerce. 

"It needed the heroic treatment of rising prices to 
enable society to reunite its shattered links, to shake 
off the shackels of feudalism, to relight and uplift the 
almost extinguished torch of civilization. That the 
disasters of the dark ages were caused by decreasing 
money and falling prices, and that the recovery there- 
from and the comparative prosperity which followed 
the discovery of America were due to an increasing 
supply of the precious metals and rising prices, will 
not seem surprising or unreasonable when the noble 
functions of money are considered. Money is the 


great instrument of association, the very fiber of social 
organism, the vitalizing force of industry, the proto- 
plasm of civilization, and as essential to its existence 
as oxygen is to animal life. Without money civilization 
could not have had a beginning ; with a diminishing 
supply it must languish, and, unless relieved, finally 

The report sets out the reason why silver was de- 
monetized in 1873. It says: — 

"Manifestly the real reason for the demonetization 
of silver was the apprehension of the creditor classes 
(money lending classes) that the combined production 
of the two metals would raise prices and cheapen 
money unless one of them was shorn of the money 
function. In Europe this reason was distinctly 
avowed. ' ' 

This conclusion has been abundantly verified, inas- 
much as every attempt made by Congress for the restor- 
ation of silver as legal tender money has been de- 
nounced as a scheme to rob the public creditors — a 
charge which has been reiterated thousands of times in 
the press, in the halls of Congress and elsewhere. 

Professor Bowen, of Massachusetts, and Represent- 
ative Gibson handed in a minority report, in which it 
was stated that every attempt made previous to 1873 to 
establish a double standard '*has been a total failure." 

Senator Boutwell, in his minority report as a mem- 
ber of the commission, stated his conclusions in effect 
as follows ; he said : — 

*'A successful use of gold and silver simultaneously 
in any country can be effected only by their consolida- 
tion upon an agreed ratio of value, or by the concur- 
rence of the commercial nations of the world." 

He, therefore, advocated a postponement of the 
free coinage of silver by the United States, "Until the 


effort to secure the co-operation of other nations has 
been faithfully tried. ' ' 

On the 4th of March, 1877, Rutherford B. Haj^es 
was inaugurated President of the United States. He 
was the beneficiary of that fraud — the Returning 
Board of Louisiana. In the formation of his cabinet 
he selected John Sherman for the responsible post of 
Secretary of the Treasury. 

During the time he was at the head of that great 
department, the national banking money power became 
more imperious in its demands upon the government. 
The United States Treasury was made wholly sub- 
servient to the clearing house of New York City. 

The immense resources of the Treasury were prac- 
tically placed at the disposal of the banks, which fact 
became so notorious, that United States Senator James 
B. Beck and other members of Congress denounced 
Secretary Sherman for bestowing such munificent fav- 
ors upon a few great banks. 

During the session of the Forty-fifth Congress, which 
came into power March 4, 1877, and which was in con- 
trol until March 4, 1879, the President was republican; 
the House was democratic by a vote of 156 to 136; the 
Senate consisted of 39 republicans, 36 democrats and i 

In the first or called session of the Forty-fifth Con- 
gress, November 5, 1877, Mr. Bland, of Missouri, intro- 
duced a bill in the House of Representatives entitled, 
"An act to authorize the free coinage of the standard 
silver dollar and to restore its legal tender character." 

The text of the bill was as follows : — 

"Be it enacted by the Senate and House of Repre- 
sentatives of the United States of America in Congress 


assembled, That there shall be coined at the several 
mints of the United States, silver dollars of the weight 
oi 4i2}4 grains troy of standard silver, as provided in 
the act of January i8, 1837, on which shall be the 
devices and superscriptions provided by said act ; which 
coins, together with all silver dollars heretofore coined 
by the IJnited States of like weight and fineness, and 
shall be a legal tender, at their nominal value, for all 
debts and dues, public and private, except where other- 
wise provided by contract; and any owner of silver 
bullion may deposit the same at any United States coin- 
age mint or assay office, to be coined into such dollars, 
for his benefit, upon the same terms and conditions as 
gold bullion is deposited for coinage under existing 

"Section 2. All acts and parts of acts inconsistent 
with the provisions of this act are hereby repealed." 

The rules were suspended by a vote of 164 yeas to 34 
nays, and the bill was passed and transmitted to the 

On November 21, 1877, Mr. Allison, from the Finance 
Committee, reported the bill to the Senate with amend- 
ments to strike out the clause beginning "And any 
owner of silver bullion, ' ' and to insert in lieu thereof 
a purchasing clause, and to add section 2 for an inter- 
national monetary conference. 

From 1862 up to 1875, the legislation of Congress 
tended wholly for the benefit of the East. Almost 
every law was enacted with the view of giving the 
New England states, New York, and Pennsylvania a 
great preponderance over the rest of the nation ; exor- 
bitant tariffs were levied on imported goods for the ben- 
efit of Eastern manufacturers, the burdens of which fell 
upon the consumer ; foreign contract labor laws were 
adopted to afford these highly-protected manufacturers 

an abundant supply of cheap labor as a means for 


crushing the various labor organizations ; out of the 
billions of money appropriated by Congress during that 
period, by far the greater portion was expended in 
those few states lying along the Atlantic ; Eastern cor- 
porations received subsidies of public money to the 
amount of millions; the great railway corporations, 
burdened with liabilities far exceeding their assets, 
robbed the west and south of hundreds of millions 
of dollars by the imposition of heavy transporta- 
tion charges, and these railways were owned by East- 
ern capitalist; while the rich silver mines of the West 
were practically rendered valueless by the demonetiza- 
tion of silver. 

During the debate in the Senate on this silver bill, 
Hon. John J. Ingalls, a republican vSenator from 
Kansas, in a speech delivered on the 14th of February, 
1877, used the following strong language: — 

"If by any process all business were compelled to be 
transacted on a coin basis, and actual specie payments 
should be enforced, the whole civilized world would 
be bankrupt before sunset. There is not coin enough 
in existence to meet in specie the one-thousandth part 
of the commercial obligations of mankind. Specie 
payments, as an actual fact, will never be resumed, 
neither in gold nor silver in January, 1879, ^^^ ^^ ^.ny 
other date, here nor elsewhere. The pretense that 
they will be is either dishonest or delusive. ' ' 

The Senator in the same speech points to the fact 
that the Eastern section- of the country had subordi- 
nated all Federal legislation to their demands, he thus 
arraigns the greed of the East : — 

"The Senator from Wisconsin was right. It is not 
the east against the west. 

"It is the east against the west and south combined. 
It is the corn and wheat and beef and cotton of the 
country against its bonds and its gold; its productive 


industry against its accumulations. It is the men who 
own the public debt against those who are to pay it, if 
it is to be paid at all. If the bonds of this government 
are ever paid, they will be paid by the labor of the 
country, and not by its capital. They are exempt from 
taxation and bear none of the burdens of society. 

*'The alliance between the west and the south upon 
all matters affecting their material welfare hereafter is 
inevitable. Their interests are mutual and identical. 
With the removal of the causes of political dissension 
that have so long separated them, they must coalesce, 
and united they will be invincible. The valleys of the 
Mississippi and Missouri, with their tributaries, form 
an empire that must have a homogeneous population 
and a common destiny from the Yellowstone to the 

"These great communities have been alienated by 
factions that have estranged them only to prey upon 
them and to maintian political supremacy by their 
separation. Unfriendly legislation has imposed intol- 
erable burdens upon their energies; invidious discrim- 
inations have been made against their products ; unjust 
tariffs have repressed their industries. While vast 
appropriations have been made to protect the harbors of 
the Atlantic, and to erect beacons upon every headland 
to warn the mariner with silent admonition from the 
**merchant-marring rocks," the Mississippi was left 
choked with its drifting sands till the daring genius of 
Eads undertook the gigantic labor of compelling the 
great stream to dredge its own channel to the sea. 
The opening of this avenue of commerce marks the 
epoch of the emancipation of the west and south from 
their bondage to the capital of the east. In asking 
the passage of this bill they are asking less than they 
will ever ask again. When I reflect upon the burdens 
they have borne, the wrongs they have suffered, I am 
astonished at their moderation." 

The charges made by Mr. Ingalls against the cupid- 
ity of the East were true, and at the same time it was 


a bitter condemnation of the record of the republican 

During the same speech on this bill, the brilliant 
Kansan had recourse to metaphor to upbraid those 
who advocated a single standard of gold, and at the 
same time he paid a glowing tribute to the monetary 
properties of the silver dollar as the money of the 

He said: — 

**No enduring fabric of national prosperity can be 
builded on gold. Gold is the money of monarchs ; 
kings covet it, the exchanges of nations are effected 
by it. Its tendency is to accumulate in vast masses 
in the commercial centers, and to move from kingdom 
to kingdom in such volumes as to unsettle values and 
disturb the finances of the world. It is the instru- 
ment of gamblers and speculators, and the idol of tha 
miser and the thief. Being the object of so much 
adoration, it becomes haughty and sensitive and 
shrinks at the approach of danger, and whenever it is 
most needed it always disappears. At the slightest 
alarm it begins to look for a refuge. It flies from the 
nation at war to the nation at peace. War makes it a 

' ' No people in a great emergency ever found a faith- 
ful ally in gold. It is the most cowardly and treach- 
erous of all metals. It makes no treaty that it does 
not break. It has no friend whom it does not sooner 
or later betray. Armies and navies are not maintained 
by gold. In times of panic and calamity, shipwreck 
and disaster, it becomes the chief agent and minister 
of ruin. No nation every fought a great war by the 
aid of gold. On the contrary, in the crisis of greater 
peril it becomes an enemy more potent than the foe in 
the field ; but when the battle is won and peace has 
been secured, gold reappears and claims the fruits of 
victory. In our own civil war it is doubtful if the gold of 


New York and London did not work us greater injury 
than the powder and lead and iron of the rebels. It 
was the most invincible enemy of the public credit. 
Gold paid no soldier nor sailor. It refused the national 
obligation. It was worth most when our fortunes were 
lowest. Every defeat gave it increased value. It was 
in open alliance with our enemies the world over, and 
all its energies were evoked for our destruction. But 
as usual when danger has been averted and the victory 
secured, gold swaggers to the front and asserts the su- 
premacy. But silver is the money of the people. It is 
the money of wages and retail. Its tendency is toward 
diffusion and dissemination. It enters into the minute 
concerns of traffic, and is exchanged day by day for 
daily bread. It penetrates the remotest channels of 
commerce, and its abundance, bulk, and small sub- 
divisions prevents its deportation in sufficient amount 
to disturb or unsettle values. If it retires at the 
approach of danger, or from the presence of an inferior 
currency, it still remains at home ready to respond to 
the first summons for its return. ' ' 

The characteristics which he attributes to gold in 
this beautiful figure of speech, were those which 
belonged to its owners, and thus he scathingly de- 
nounced the greed of the gold gamblers and bullion 
brokers of the East, who, during the war, rejoiced at 
every reverse of the northern armies, for, with the 
sinking of the fortunes of the Union cause, the more 
valuable became gold proportionately. 

The silver bill as amended by the Senate was 
returned to the House for concurrence and passage. 
The manner in which the House bill was mutilated by 
the Senate aroused the anger of the House, and a 
fierce debate arose between the friends of silver and 
its opponents. Some of those who most strongly 
opposed the bill as a concession to the West and South 


were men who were notorious for the scandals that 
blackened their reputations as public men. Those 
members of Congress, who opposed the remonetization 
of silver in any form whatever, had, in their past 
careers, shown a remarkable inclination for Credit 
Mobilier stock, and other corrupt deals which had so 
deeply disgraced preceding Congresses. 

Yet these Credit Mobilier statesmen were the ones 
who prated the loudest for the " public credit, " *'the 
public faith," and ** honest money." It was Satan 
preaching against sin. 

Among other powerful advocates of the coinage of 
silver was John G. Carlisle, who was recognized on 
the floor of the House as its ablest logician. Mr. Car- 
lisle charged that the demonetization of silver was 
brought about by a conspiracy of the money power. 

He said : — 

*'I know that the world's stock of precious metals is 
none too large, and I see no reason to apprehend that 
it will ever be so. Mankind will be fortunate indeed if 
the annual production of gold and silver coin shall 
keep pace with the annual increase of population, com- 
merce, and industry. According to my views of the 
subject, the conspiracy which seems to have been 
formed here and in Europe to destroy by legislation 
and otherwise from three-sevenths to one-half of the 
metallic money of the world is the most gigantic crime 
of this or any other age. The consummation of such 
a scheme would ultimately entail more misery upon 
the human race than all the wars, pestilences, and 
famines that ever occurred in the history of the world. 

"The absolute and instantaneous destruction of half 
the entire movable property of the world, including 
houses, ships, railroads, and other appliances for carry- 
ing on commerce, while it would be felt more sensibly 
at the moment, would not produce anything like a pro- 


longed distress and disorganization of society that 
must inevitably result from the permanent annihilation 
of one-half the metallic money of the world. " 

This terrific arraignment of the money power was 
followed by an appeal to the House, in which he 
advised the blocking of the wheels of government by 
a refusal to appropriate money for its support should 
the President veto the bill. He said: — 

" The struggle now going on cannot cease, and 
ought not to cease, until all the industrial interests of 
the country are fully and finally emancipated from the 
heartless domination of syndicates, stock exchanges, 
and other great combinations of money grabbers in 
this country and in Europe. Let us, if we can do qo bet- 
ter, pass bill after bill, embodying in each some sub- 
stantial provision for relief, and send them to the 
executive for his approval. If he withholds his sig- 
nature, and we are unable to secure the necessary 
vote, here or elsewhere, to enact them into laws not- 
withstanding his veto, let us, as a last resort, suspend 
the rules and put them into the general appropriation 
bills, with the distinct understanding that if the people 
can get no relief the government can get no money. ' ' 

After a long debate the House finally acquiesced in 
the senate amendments. It was the bill as amended 
by the Senate or nothing, for at that time the upper 
house was the stronghold of the money grabbers, 
syndicates^ and combinations of capital, whose greed 
was so severely denounced in the powerful speech 
of Mr. Carlisle. 

The bill as amended by the Senate finally passed 
both houses, and was presented to President Hayes, 
who returned it to the House with his veto and a mes- 
sage stating his reasons for refusing to sign the 


In his veto message, the President states that one 
of the reasons why the bill does not meet his approval 
arose from the fact that the proposed dollar would be 
worth but ninety or ninety-two cents, as compared 
with the standard gold dollar. 

It will be remembered that the sole reason advanced 
by John Sherman, at this time Secretary of the Treas- 
ury, for the demonetization of the silver dollar in 1868 
and subsequent years, was, that the silver dollar was 
more valuable than the gold dollar. 

President Hayes, and presumably his Secretary of 
the Treasury, urged as a reason for the veto of this bill 
providing for the coinage of silver, that it was worth 
less than the gold dollar. 

The President says : — 

"The right to pay duties in certificates for silver 
deposits will, when they are issued is sufficient amount 
to circulate, put an end to the receipt of revenues in 
gold, and thus compel the payment of silver for both 
the principal and interest on the public debt. ' ' 

The future receipts of revenues have shown that this 
prophecy of President Hayes fell to the ground. After 
the passage of this bill over his veto, the volume of 
gold in circulation and in the banks increased in the 
course of a few years to many millions of dollars. 

The President further says: — 

"The standard of value should not be changed with- 
out the consent of both parties to the contract. Na- 
tional promises should be kept with unflinching fidel- 
ity. There is no power to compel a nation to pay its 
just debts. Its credit depends on its honor. The 
nation owes what it has led or allowed its creditors to 
expect. I cannot approve a bill which, in my judg- 
ment, authorizes the violation of sacred obligations. 
The obligation of public faith transcends all questions 


of profit or public advantage. Its unquestionable main- 
tenance is the dictate as well of the highest expediency 
as of the most necessary duty, and should ever be care- 
fully guarded by the executive, by congress, and by 
the people." 

This plea for the poor bond holder, that noble patriot 
who originally bought bonds as low as thirty-five 
cents on the dollar, bearing gold interest the equiva- 
lent in currency to eighteen per cent. , payable a year 
in advance, and used by him as loaded dice to gamble 
on the public credit, was the dear object of the Presi- 
dent's solicitude. 

The bond holders who secured the passage of the 
Credit Strengthening Act of March i8, 1869, an act 
which enhanced the value of his bonds enormously, 
had become sacred in the eyes of the weak Hayes. 

The veto message of the President angered Congress, 
and, on the same day, it rode rough shod over his veto 
by more than the necessary two-thirds vote, and the 
bill became a law on the 28th day of February, 1878. 

To enable the reader to fully understand the coinage 
law of 1878, we incorporate the text of the act in full. 

It is as follows ; viz. : — 

"An act to authorize the coinage of the standard sil- 
ver dollar, and to restore its legal tender character. 

"Be it enacted, etc., That there shall be coined, at 
the several mints of the United States, silver dollars 
of the weight of 41 2 1^^ grains troy of standard silver, 
as provided in the act of January i8, 1837, on which 
shall be the devices and superscriptions provided by 
said act; which coins, together with all silver dollars 
heretofore coined by the United States, of like weight 
and fineness, shall be a legal tender, at their nominal 
value, for all debts and dues, public and private, 
except where otherwise expressly stipulated in the con- 


tract. And the secretary of the treasury is authorized 
and directed to purchase, from time to time, silver 
bullion at the market price thereof, not less than 
$2,000,000 worth per month nor more than $4,000,000 
worth per month, and cause the same to be coined 
monthly, as fast as so purchased, into such dollars; 
and a sum sufficient to carry out the foregoing pro- 
vision of this act is hereby appropriated out of any 
money in the treasury not otherwise appropriated. 
And any gain or seigniorage arising from this coinage 
shall be accounted for and paid into the treasury, as 
provided under existing laws relative to the subsidiary 
coinage: Provided, That the amount of money at any 
one time invested in such silver bullion, exclusive of 
such resulting coin, shall not exceed $5,000,000; And 
provided further. That nothing in this act shall be 
construed to authorize the payment in silver of cer- 
tificates of deposit issued under the provisions of sec- 
tion 254 of the Revised Statutes. 

'* Section 2, That immediately after the passage of 
this act the President shall invite the governments of the 
countries comprising the Latin union, so called, and 
of such other European nations as he may deem advis- 
able, to join the United States in a conference to adopt 
a common ratio between gold and silver, for the pur- 
pose of establishing, internationally, the use of bi-me- 
tallic money and securing fixity of relative value 
between those metals, such conference to be held at 
such place, in Europe or the United States, at such 
time within six months, as may be mutually agreed 
upon by the executives of the governments joining in 
the same, whenever the governments so invited, or 
any three of them, shall have signified their willing- 
ness to unite in the same. 

"The President shall, by and with the advice and 
consent of the senate, appoint three commissioners, 
who shall attend such conference on behalf of the 
United States, and shall report the doings thereof to 
the President, who shall transmit the same to congress. 


"Said commissioners shall each receive the sum of 
$2,500 and their reasonable expenses, to be approved 
by the secretary of state, and the amount necessary to 
pay such compensation and expenses is hereby appro- 
priated out of any money in the treasury not otherwise 

"Section 3. That any holder of the coin authorized by 
this act may deposit the same with the treasurer or 
any assistant treasurer of the United States, in sums 
not less than ten dollars, and receive therefor certifi- 
cates of not less than ten dollars each, corresponding 
with the denominations of the United States notes. 
The coin deposited for or representing the certificates 
shall be retained in the treasury for the payment of the 
same on demand. Said certificate shall be receivable 
for customs, taxes, and all public dues, and, when so 
receiv^ed, may be reissued. 

"Section 4. All acts and parts of acts inconsistent 
with the provisions of this act are hereby repealed." 

A comparison drawn between the provisions of the 
original bill introduced by Mr. Bland and passed by 
the House, and those of the act of Februan,- 28th, will 
be instructive. 

The House bill was a free coinage measure, and it 
placed silver as a money metal on the same footing as 
gold. It proposed to restore silver to the same posi- 
tion which it held, in law, prior to its demonetization 
in 1873. 

Free coinage of gold created an unlimited demand 
for it as money. Under free coinage, the owner of 
gold bullion had the right of entry to any mint of the 
United States, he could have his bullion transformed 
into gold coin without charge, and returned to him 
as full legal tender money. Therefore, the law 
which conferred the right of free coinage upon the 
owner of gold bullion created an unlimited demand 


of the use of that precious metal, as money; the 
Government had never restricted the amount of gold 

Free and unlimited coinage of silver likewise would 
have created a demand for it as money as extensive as 
its production. 

In all ages, the chief use of the precious metals arose 
from their utility as a medium of exchange — money. 

The demand for the use of these metals has always 
exceeded their supply. 

By the Bland-Allison law, the coinage of silver dol- 
lars was limited, and that coinage was on Government 
account alone. 

At the time of the passage of the Bland-Allison law, 
the production of silver from the mines of the United 
States amounted to more than $45,000,000 for that 

Since the demonetization of silver in 1873, its 
total production in the United States amounted to 
J2 1 0,000, 000. 

This law provided for the purchase of not less than 
$2,000,000 of silver nor more than $4,000,000 per 

The bullion so bought by the Government was to be 
coined into dollars as fast as purchased, and the gain 
or seigniorage arising from this coinage was to be paid 
into the Treasury. 

It will be seen that the Secretary of the Treasury 
was not legally compelled to purchase more silver per 
month than the minimum amount ($2,000,000). 

A purchase of the minimum amount of silver would 
afford a market for only one-half of the yearly pro- 
duction, and this would result in an accumulation of a 


large surplus for which there would be no demand. 
This surplus would fix the price of every ounce of sil- 
ver mined in the United States, causing a fall in its 
bullion value. 

This result would afford an opportunity for the na- 
tional banking money power to point to the silver dol- 
lar as a "dishonest dollar," a "90-cent dollar." 

Mr. Sherman held the Treasury portfolio, and it was 
averred that he would use all the influence of his office 
to discredit the new coinage. He was known to be an 
unrelenting enemy of the free coinage of silver, and 
his subsequent speeches and writings gave abundant 
proofs of that fact. 

It was further provided in that act, that the amount 
of money at any one time invested in such silver bul- 
lion, exclusive of such resulting coin, should not exceed 

By this restriction the Secretary of the Treasury 
could limit the annual purchase of silver to §29,000,000. 
He was not compelled to purchase silver exceeding 
$2,000,000 per month, or $24,000,000 per annum, and 
this policy which was carried out by the Secretary, 
made the Government a "bear" in the silver market. 

This law gave rise to a new form of contracts based 
upon the legal tender clause which contained the fol- 
lowing language, "Except where otherwise expressly 
stipulated in the contract. ' ' 

This exception was the most absurd provision ever 
embodied in a monetary law. It declared the silver 
dollar to be legal tender, yet it conferred upon money 
lenders the power to demonetize it by private contract. 
It made the mere will of an individual superior to the 
collective will of the nation. It placed the greed of 


the shylock above the power of the constitution. 
Every usurer was permitted to constitute himself a 
Congress and a President to demonetize silver at w411. 
While the powerful Government of the United States 
was compelled to receive these silver dollars for debts 
and demands due it, the holders of mortgages could 
exact gold obligations. It transferred to the hands of 
the national banking money powder the right to loan 
Government credit in the form of bank notes, costing 
it one cent on the dollar, at a high rate of interest, 
exact a note payable in gold, with the "vested privi- 
lege" of making war against the currency of the United 

It built up a powerful privileged class, whose inter- 
ests would be antagonistic to any future legislation of 
Congress, having for its object an enlarged use of sil- 
ver as money. 

In his uncontradicted evidence before the British 
gold and silver commission, on June 24, 1887, J. Barr 
Robertson stated that "The French law makes it crim- 
inal to act on the basis of premium on money or dis- 
count on money. It always did soi ' * 

The policy of France, which has the most scientific 
system of money in the world, makes it a crime for 
any one of its citizens to attempt to demonetize its 
money by private contract. 

In that nation, the sovereign power of the State over 
the legal value of money cannot be impaired by the 
greed of money changers, bullion dealers, and bankers. 
After the enactment of this law a new system of 
written contracts providing for the payment of money 
came into vogue, denominated "gold contracts," all of 
which contained a stipulation that the obligation 


should be payable in "Gold coin of the present weight 
and fineness or its equivalent," 

Railroad bonds and mortgages containing gold 
clauses, aggregating many hundreds of millions of 
dollars, were fastened upon this species of property, 
and real estate mortgages and promissory notes 
amounting to immense sums were made payable in 
gold coin. 

This plan of the money-lending class actually made 
an enormous indebtedness payable in gold, a coin con- 
stantly appreciating in value, and it practically made 
the single standard of gold the financial policy of the 

Not a single United States bond expressed an agree- 
ment to pay in gold, and yet the Government turned 
the great majority of its citizens over to the tender 
mercies of the money-lenders of the East and Great 
Britain, by authorizing them to exact gold payments. 

The legality of contracting against any part of the 
legal tender money of the nation is extremely doubtful ; 
and it seems that, on the plainest principles of justice, 
and on the highest grounds of public policy, a contract 
in which it is sought to demonetize legal tender money 
is utterly void, and is therefore unconstitutional. 

Section 2 of the Bland-Allison Act authorized the 
President to invite the countries of Europe to join the 
United States in a conference to secure the adoption of 
a common ratio betw^een gold and silver, and for the 
purpose of establishing an international bi-metallic 
money, and securing fixity of relative value between 
these metals. 

The President was authorized to appoint three Com- 
missioners to represent the United States at such 


conference, if any should be held. The Commissioners 
were to report the doings of the conference and he 
was to transmit the same to Congress. 

This section marked the beginning of those succes- 
sive pilgrimages of so-called international monetary 
commissions, who, as the representatives of the United 
States, humiliated the American people by begging 
the aid of European monarchies to assist in the estab- 
lishment of a financial system for this republic. 

Section 3 provided for the issue of silver certificates 
to any person who deposited with the Treasurer or any 
Assistant Treasurer of the United States silver dollars 
in sums of not less than ten dollars. 

The coin deposited for these certificates was to be 
retained in the Treasury for the payment of the said 
certificates on demand. These certificates were receiv- 
able for customs, taxes and all public dues, and when 
so received could be reissued. 

The object of this section in providing for the issu- 
ance of silver certificates was to obviate objections 
against the use of silver because of its weight. The 
certificate was a credit money based on the silver dol- 
lars so deposited, which latter constituted a trust fund 
as a means for redeeming the certificates. 

To Senator Booth, of California, belongs the honor 
of suggesting the provisions of section 3 of this law. 

Section 4 repealed all former laws inconsistent with 
the act. 

When this bill was up for consideration before Con- 
gress, the national banking money power and its subsi- 
dized press continually prophesied that if the silver 
bill should become a law, the gold of the nation would 
take flight to Europe, leaving this country upon a 


silver basis. The leading national bank presidents of 
New York City were especially active in denouncing 
the bill, and numerous predictions were made by them 
that it would be impossible to resume specie payment 
if it became a law. 

George S. Coe, President of the American Exchange 
National Bank of New York City, publicly stated that 
'he would give $50,000 to be at the head of the line of 
those who would present themselves at the sub- treasury 
on the ist day of January, 1879, to offer greenbacks 
for gold, should President Hayes not veto the bill. 

So far as is known, Mr. Coe still retains his $50,000, 
which he publicly stated that he would offer for the 
privilege of having the first opportunity to present 
greenbacks for redemption in gold, and for the plain 
reason that greenbacks were at par with gold — that 
yellow divinity of the money changers — before the ist 
day of January, 1879, approached. 

One of the reasons urged against the passage of the 
Bland-Allison law, as stated heretofore, was that it 
would endanger the resumption of specie payments, and 
that it would result in placing the country on a silver 

On the 19th of March, 1878, three weeks after the 
law was in force. Senators Morill, Dawes, Ferry, Jones, 
Allison, Keman, Wallace, Bayard, and Voorhees, com- 
posing the Finance Committee of the Senate, had a con- 
ference with Secretary Sherman to obtain his views 
upon the effect of the new silver coinage law upon 

During this conference the following statements 
were made by the Secretary to the committee in 
answer to the inquiries of its members : — 



*' Chairman: What effect has the silver bill had, or 
is likely to have, upon resumption? 

"Secretary Sherman: I do not want to tread on 
delicate ground in answering that question, Mr. Chair- 
man. I shall have to confess that I have been mis- 
taken myself. Now, as to the silver bill, I have 
watched its operations very closely. I think the silver 
bill has had some adverse effects, and it has had some 
favorable effects, on the question of resumption. Per- 
haps the best way for me to proceed would be to state 
the adverse effects first. It has undoubtedly stopped 
refunding operations. Since the agitation of the silver 
question, I have not been able largely to sell bonds, 
although I have made every effort to do so. 

"Now, another adverse effect the silver bill has had 
is to stop the accumulation of coin. Since the ist of 
January we have accumulated no coin, except for coin 
certificates, and except the balance of revenue over 
expenditure. The revenues in coin being more than 
enough to pay the interest of the debt and coin liabili- 
ties, we accumulate some coin. 

"Another effect that the silver bill has had is to 
cause the return of our bonds from Europe. Although 
the movement of our bonds in this direction has been 
pretty steady for more than a year, yet it is latterly 
largely increased, how much I am not prepared to say. 

"On the other hand, I will give the favorable effects. 
In the first place, the silver bill satisfied a strong public 
demand for bi-metallic money, and that demand is, no 
doubt, largely sectional. No doubt there is a differ- 
ence of opinion between the West and South and the 
East on this subject, but the desire for remonetization 
of silver was almost universal. In a government like 
ours it is always good to obey the popular current, and 
that has been done, I think, by the passage of the 
silver bill. Resumption can be maintained more easily 
upon a double standard than upon a single standard. 
The bulky character of silver would prevent payments 
in it, while gold, being more portable, would be more 


freely demanded, and I think resumption can be main- 
tained with a less amount of silver than of gold alone. 

"Senator Bayard: You are speaking of resump- 
tion upon the basis of silver, or of silver and gold? 

"Secretary Sherman: Yes, sir; I think it can be 
maintained better upon a bi-metallic, or alternative 
standard, than upon a single one, and with less accu- 
mulation of gold. In this way remonetization of silver 
would rather aid resumption. The bonds that have 
been returned from Europe have been readily absorbed 
— remarkably so. The recent returns in New York 
show the amount of bonds absorbed in this country is 
at least a million and a quarter a day. We have sold 
scarcely any from the Treasury since that time. This 
shows the confidence of the people in our securities, 
and their rapid absorption will tend to check the 
European scare. 

"Senator Voorhees: That shows, Mr. Secretary, 
that this cry of alarm in New York was unfounded. 
Then, this capital seeks our bonds when this bi-metallic 
basis is declared? 

"Secretary Sherman: Yes; many circumstances 
favor this. The demand for bonds extends to the 
West and to the banks. 

' ' Senator Jones : Then, in its effect upon the return 
of the vast amount of bonds you refer to, would there 
not be an element of strength added in favor of 
resumption, in that the interest on these bonds 
returned would not be a constant drain upon the 

"Secretary Sherman: Undoubtedly. 

"Senator Jones: Would the fact that they come 
back enable us to maintain resumption ranch easier? 

"Secretary Sherman: Undoubtedly. 

"Senator Bayard: You speak of resumption upon 
a bi-metallic basis being easier. Do you make that 
proposition irrespective of the readjustment of the 
relative values of the two metals as we have declared 


"Secretary Sherman: I think so. Our mere right 
to pay in silver would deter a great many people from 
presenting notes for redemption who would readily do 
so if they could get the lighter and more portable coin 
in exchange. Besides, gold coin can be exported, 
while silver coin could not be exported, because its 
market value is less than its coin value. 

"Senator Bayard : I understand that it works prac- 
tically very well. So long as the silver is less in value 
than the paper you will have no trouble in redeeming 
your paper. When a paper dollar is worth ninety- 
eight cents nobody is going to take it to the Treasury 
and get ninety- two cents in silver; but what are you 
to do as your silver coin is minted? By the ist of July 
next or the ist of January next you have eighteen or 
twenty millions of silver dollars which are in circula- 
tion and payable for duties, and how long do you sup- 
pose this short supply of silver and your control of it 
by your coinage will keep it equivalent to gold — when 
one is worth ten cents less than the other? 

' ' Secretary Sherman : Just so long as it can be used 
for anything that gold is used for. It will be worth in 
this country the par of gold until it becomes so abun- 
dant and bulky that people will become tired of carrying 
it about; but in our country that can be avoided by 
depositing it for coin-certificates." 

Such was the testimony given by Secretary Sherman 
in reply to the questions propounded to him by these 
distinguished men, and it demonstrated the real 
reason why a single standard of gold was preferred by 
the national banking money power. Gold, from its 
portability, could be more easily exported than silver, 
and large quantities of the former metal could be 
readily shifted back and forth between New York City 
and London as a means to create temporary panics, 
and thus afford the gold gamblers and stock specula- 
tors opportunities to depress or raise the price of 


bonds, stocks, and securities whenever it subserved 
their interests. 

In 1878, after the passage of the Bland-Allison law. 
Secretary Sherman authorized the sub-treasury at 
New York City to become a member of the Clearing 
House Association, whose membership consisted of 
sixty-six national banks of that city. 

This association was the most powerful financial 
body in the United States, and it was the head and 
front of the money power. 

This act of Secretary Sherman was an exceedingly 
shrewd move on his part to add an official sanction to 
the war that was to be waged against the use of silver 
and silver certificates by the Clearing House Associa- 

To afford a consecutive statement of the various 
financial measures of Congress, we must retrace our 
steps to the i6th day of January, 1878. 

At and prior to this time a controversy arose as 
to whether United States bonds were payable in gold 

To set this question at rest forever. Senator Mat- 
thews, of Ohio, submitted a concurrent resolution in 
the Senate, declaring that all United States bonds 
issued under the Refunding Act of July 14, 1870, and 
the Resumption Act of January 14, 1875, could be paid 
at the option of the government in standard silver 
dollars of 412)^ grains without violation of the public 

All proposed amendments were voted down, and the 
resolution was agreed to by a vote of 43 yeas to 22 

On January 29, 1879, the House agreed to the resolu- 


tion in the form in which it came from the Senate by 
a vote of 189 yeas to 79 nays. 

Divested of its preamble which merely recited the 
facts in controversy, the resolution is as follows : — 

** Resolved by the Senate (the House of Representa- 
tives concurring therein), That all the bonds of the 
United States issued under the said acts of Congress 
hereinbefore recited are payable, principal and interest, 
at the option of the government of the United States, 
in silver dollars of the coinage of the United States, con- 
taining 412^ grains each of standard silver ; and that to 
restore to its coinage such silver coins as a legal tender 
in payment of said bonds, principal and interest, is 
not in violation of the public faith nor in derogation 
of the rights of the public creditor. " 

It is in force to this day as declaratory of the finan- 
cial policy of the United States. 

On December 9, 1878, Mr. Fort moved that the 
House suspend the rules and pass a resolution, declaring 
any discrimination against standard silver dollars by 
National Banking Associations a defiance of law, and 
instructing the Committee on Banking and Currency 
to report a bill for withdrawing their circulation. 
• The resolution received a majority, but not the nec- 
essary two-thirds vote, and it failed to pass. 

The republican members of the House voted almost 
solidly against the resolution. 

This resolution was brought forward in the House 
as a warning to the Clearing House Association of 
New York City, composed largely of national banks, 
for its refusal to accept silver dollars and silver certifi- 
cates in settlement of balances due from the various 

Although the Bland -Allison law was in effect but 
a few months, the traitorous national banking money 


power at once begun a war upon the lawful money of 
the United States, and this was done with the open 
consent of the Secretary of the Treasury, who had 
made the sub-treasury at New York City a member of 
the Clearing House Association as an aid to the con- 
summation of its schemes. 

This action of the national banks in thus deliberately 
conspiring to nullify a law of the United States, gave 
origin to a warm debate in Congress, during which 
Secretary Sherman was severely criticised for giving 
official sanction to the acts of the associated banks. 

During the session of the Fifty-first Congress, at 
which time Mr. Sherman was a member of the Senate, 
Senator Morgan, of Alabama, in a debate upon the 
money question, recalled this fact and asserted that 
the former had, while Secretary of the Treasury, been 
cognizant of the designs of the clearing house banks to 
refuse silver in payment of balances, and that those 
banks were emboldened to pursue that course by the 
acquiescence of the Secretary. 

He proceeded to quote from a statement made by 
Mr. Weston, Secretary of the Monetary Commission 
of 1886, in which the latter said: — 

"On the 8th inst. [November, 1878,] a committee of 
these banks [New A^'ork Clearing House Association] 
had a conference at Washington with the Secretary of 
Treasury [Mr. Sherman], at which were present the 
Attorney-General and some minor officials. 

"The result was a plan submitted by the banks on 
the 12th inst., and agreed to, only one bank represent- 
ative [Mr. Colgate] objecting. The leading features 
of it, are first, that the banks will reject silver depos- 
its, except as re-payable in kind; second, that silver 
shall not be allowed as clearing house money except 


for small fractional sums not exceeding $io; and 
third, that in respect to all payments by government 
drafts on the New York banks or on the United States 
assistant treasurer at New York, they shall be cleared 
at the clearing house in New York, at which a desk is 
to be assigned to a representative of the United States 
Treasury. At the bank meeting on the 12th Mr. Col- 
gate objected to the plan, that it could only mean 'To 
fly in the face of Congress and to declare the silver 
dollar that has been declared a legal tender to be 
worthless. * ' 

In spite of the immense power of the banks, aided 
by the official power of Secretary Sherman, to dis- 
credit the legal tender silver dollars and silver certifi- 
cates. Congress, at its very next session, after this 
exposure of the conduct of the Clearing House Associa- 
tion and that of Secretary Sherman, passed a law 
requiring that no national bank should become a mem- 
ber of any clearing house, or exercise any privilege 
therein to any kind whatever, unless it agreed to 
accept silver on deposits and receive silver certificates 
as money through which the balances might be settled. 

Although the organized banks still continued their 
aggressions upon the rights of the people, and although 
they exerted their utmost power to degrade the silver 
dollar and its representative, this money became so 
popular with the people that they exchanged gold coin 
for silver certificates at the Treasury of the United 

This exchange of gold coin for silver began in 
November, 1880, and continued until the Treasury 
made a gain in gold aggregating $78,000,000. Thus 
the absurd predictions set forth in the veto message of 
President Hayes, and echoed by the senseless clamors 


of the national banks, were answered by the common 
sense and patriotism of the people of the United States. 

In 1878, the year that the Bland- Allison bill became 
a law, the number of failures were 10,478, with liabili- 
ties of $234,383,000; in the following year of 1879 the 
list of failures were only 6,658, with liabilities of 
$98,149,000 — a remarkable decrease. 

According to the provisions of the Resumption Act 
of 1875, greenbacks were redeemable in specie on and 
after the ist day of January, 1879. Prior to this time 
greenbacks and United States notes were on a parity 
with gold, and hence on May 31, 1878, Congress enacted 
a law forbidding the further destruction of these legal 
tenders, and the Secretary of the Treasury was author- 
ized to re-issue them for the payment of demands against 
the United States. Senator Thurman introduced this 
bill in the Senate, and against the combined opposition 
of the national banks, secured its passage through Con- 
gress, thus preserving this currency to that amount. 

In the meantime, however, prior to January i, 1879, 
Secretary Sherman issued a circular to the collectors 
of the various ports throughout the United States, 
directing them to receive United States notes and 
Treasury notes in payment of duties on imported goods. 

The act of July ii, 1862, which provided for the 
issue of Treasury notes, prohibited the Secretary of the 
Treasury from receiving them for duties on imports. 

Nevertheless Secretary Sherman, by a mere execu- 
tive order, nullified this part of that act by ordering 
the collectors of custom duties to receive them. This 
order made the Treasury notes, in this respect, the 
equal of gold. 

The object of the Secretary in adopting this policy 


excited considerable discussion in Congress, but the 
order was acquiesced in by the people, for the reason 
that the discrimination so long exerted against the 
greenback was withdrawn. The government honored 
its own currency by receiving it for taxes — the best 
form of redemption ever adopted by a nation. 



*'The wisdom of the whole nation can see farther than 
the sages of Westminster Hall. The collective 
knowledge and penetration of the people at large are 
more to be depended on than the boasted discernment 
of all the bar. The reason is clear: Their eyes are 
not dazzled by the prospects of an opposite interest. 
The Crown has no lure sufficiently tempting to make 
them forget themselves and the general good. "— . 
Edmund Burke. 

The profoundest thinkers upon the subject of free 
government have always maintained that the common 
people are inspired by nobler sentiments of justice 
than that select class who arrogate to themselves all 
virtue and knowledge. 

History has affirmed, time and again, that the col- 
lective wisdom of the people is the safest guide for a 

The celebrated Edmund Burke, in that splendid 
defense of Woodfall, the publisher of the letters of 
Junius, goes so far as to declare, in the august pres- 
ence of the highest court of England, that the sense 
of justice prevalent among the common people is truer 
than that entertained by those learned in the law. 

The reason why the common people seldom err in 
their instincts of justice is, that they are not the highly 
favored subjects of special privileges, and that they 
are not continually seeking unearned advantages over 
their fellow-men. 

On the other hand the moving reason why the 


wealthy, privileged, and aristocratic portion of man- 
kind is not animated and governed as largely by the 
plain principles of justice, as the great majority of com- 
mon people, is very apparent, as it is an established fact 
that the possession of great wealth and privileges ren- 
der its possessors eager for added accumulations, and 
this results in a selfishness from which springs by far 
the larger part of the unnecessary evils of govern- 

With this latter class the desire of heaping up great 
wealth develops into a controlling passion — in many 
cases it degenerates into a mania. 

This observation is true of the national banking 
money power. Notwithstanding it received a gift of 
the most valuable and profitable franchises ever con- 
ferred upon organized capital, it was continually 
demanding new concessions at the hands of Congress. 
It was insatiable. 

This money power persevered in its vindictive war- 
fare against the people, its subsidized press publicly 
threatened Congress with a visitation of wrath, and it 
utilized its control of the currency to oppress. 

It asserted that the country needed a king, and that 
a strong government should be erected upon the ruins 
of American liberty. 

The national banks continued their opposition to the 
coinage of silver, but without avail. 

On April i6, 1879, the Committee on Coinage, 
Weights, and Measures, by Hon. A. H. Stephens, of 
Georgia, reported House bill No. 4, which provided 
that fractional silver coins should be a legal tender for 
any sum not exceeding ten dollars in any one pay- 


On April 19, 1879, Mr. Springer moved an amend- 
ment to the third section of the bill, increasing the 
legal tender debt-paying power of fractional silver coin 
to twenty dollars in any one payment. 

The bill so amended in its third section passed the 
House on the 2 2d day of April, 1879, and it was trans- 
mitted to the Senate, where, on May 28th, an amend- 
ment offered by the Committee on Finance was 
adopted, striking out the word ''twenty" and inserting 
the word "ten" in lieu thereof. 

The bill thus amended passed the Senate, was con- 
curred in by the House, and became a law June 9, 1879. 

The effect of this measure increased the legal tender 
power of fractional silver coins from five dollars to 

On the same day the House passed a bill providing 
for the exchange of trade dollars for legal tender 
standard silver dollars. 

It was sent to the Senate but that body buried it by 
a reference to the Finance Committee. 

Had this proposed measure been enacted into law, a 
large volume of full legal tender silver dollars would 
have been added to the circulation, increasing the 
amount of money at least thirty millions, and it would 
have removed a large mass of non-legal tender trade 
dollars as a disturbing element in the silver market. 

The national banks opposed this bill, and hence it 
was smothered in the republican Senate. 

On June 27, 1879, Mr. Vest, of Missouri, offered the 
following resolution in the Senate : — 

"Resolved by the Senate (the House of Representa- 
tives concurring), That the complete remonetization 
of silver, its full restoration as a money metal, and its 


free coinage by the mints of the United States are 
demanded alike by the dictates of justice and wise 
statesmenship. ' ' 

On June 30th this resolution was referred to the 
Committee on Finance on motion of Mr. Allison, by a 
vote of 23 yeas to 22 nays. 

This resolution was never reported from this com- 
mittee back to the Senate. 

One singularity which will attract the attention of 
the reader is, that every measure adopted by the 
House providing for the restoration of silver, was, on 
reaching the Senate, uniformly referred to the Finance 
Committee, from whence it never returned. 

As it was then constituted, the Finance Committee 
was composed largely of Eastern Senators, and this 
fact affords an explanation of the wonderful facility 
with which this committee nullified all efforts of the 
House for remedial legislation. 

In the meantime Secretary Sherman was administer- 
ing the Treasury Department with a view of throwing 
discredit upon the silver coinage, and he persisted in 
the policy of refusing to pay out silver dollars, except 
where specific demands were made for that money. 
His object in following out this line of policy, aimed 
at a large accumulation of silver dollars in the Treas- 
ury, and this condition would supply him with argu- 
ments to convince Congress, if possible, that no one 
desired silver as money. This intention was evidenced 
by a communication to Congress by him, in which he 
requested an appropriation for the construction of 
additional vaults for the storage of standard silver 

At this period United States bonds were at a very 


high premium, and this fact led to a severe contrac- 
tion of the currency by the national banks. 

It will be remembered that the original National 
Banking Act of February 25, 1863, provided for a dis- 
tribution of circulating bank notes, and as a conse- 
quence of that provision the power to suddenly con- 
tract or expand the volume of circulating notes w^as 
withheld from the banks. 

This salutary provision was repealed by section 4 of 
the act of June 20, 1874, which authorized the national 
banks at any time, and for any reason which they 
chose to consider sufficient, to deposit United States 
notes and treasury notes to secure their circulating 
bank notes, and contract the currency to the extent 
of the substitution of government legal tenders for the 
bonds deposited as security by the national banks; 
these banks then withdrew their bonds and sold them 
for the high premium which they then commanded. 

This powder conferred on the national banks, by 
which they could contract the volume of currency, was 
a standing menace against the prosperity of the coun- 
try; and armed \vith this destructive weapon they 
could, without any notice to the people, prostrate every 
industry in the country. 

The extent to which this sudden contraction and 
expansion was practiced by the banks was clearly 
stated in a report made by Mr. Gilfillan, United States 
Treasurer, for the year 1880. Mr. Gilfillan says: — 

■'Under the construction placed upon the law, banks 
which have thus reduced their circulation have been 
permitted to increase it again as often and as largely 
as they chose, whether their legal tender deposits 
were exhausted or not. An example will better illus- 
trate these operations. In January and February, 


1875, a certain bank reduced its circulation from 
$308,490 to $45,000 by deposits of legal tender notes. 
Between September 26, 1876, and May 26, 1877, and 
before that deposit was exhausted, it increased its 
circulation to $450,000. Between August 14th and 
September 10, 1877, it again reduced its circulation to 
$45,000. On September 19, 1877, nine days after 
completing the deposits for this reduction, it again 
began to take out additional circulation, although 
$402,550 of prior deposits remained in the Treasury, 
and by the 26th of that month its circulation had again 
been increased to $450,000. July 22, 1878, it, for the 
third time, reduced its circulation to $45,000, and in 
August and September, 1879, again increased it to 
$450,000, at which it now remains, the balance (5f its 
former legal tender deposit then in. the Treasury being 

This report exhibits the dangerous power placed in 
the hands of the national banks to unsettle values, 
disturb business, and inflict panics whenever it was to 
the interests of the national banking money power to 
exhibit their strength over the legitimate business of 
the people. 

Mr. Gilfillan further says : — 

' ' No one will contend that this was a legitimate and 
proper method of conducting business under the 
national banking system, and yet it can be resorted to 
every-day by every bank in the United States as long 
as the fourth section of the act of June 20, 1874, 
remains unrepealed. It disturbs values, afiEects the 
money market, and subjects the government to unnec- 
essary expense, merely to gratify a spirit of speculation 
and gain on the part of the managers of the bank, and 
it ought to be peremptorily forbidden in the future. ' ' 

This last extract clearly demonstrates that it was in 
the power of the thousands of national banks to effect 
a combination, or trust, for the contraction of the 


volume of currency whenever such policy would be 
decided upon by them to influence the legislation of 

During 1880 and 1881, a large amount of the national 
debt would fall due, and provision must be made for 
the payment of bonds aggregating $800, 000, 000. These 
bonds bore interest at the rate of 4, 4^ and 5 per cent, 
per annum. 

During the session of 1879, Representatives Garfield, 
of Ohio, and Wood, of New York, both introduced bills 
in the House, providing for the exchange of these 
maturing obligations for bonds bearing four per cent, 
interest, and running from twenty to forty years. 
These bills were referred to the appropriate committee, 
where they remained until the latter part of 1880. 

After the presidential election of that year the com- 
mittee reported a substitute for the Wood bill, provid- 
ing for the funding of these maturing bonds at three 
and one-half per cent, interest, and running from ten 
to forty years. 

A strenuous effort was made to push this bill through 
the House, but it was not successful, and it was 
amended by that body, making the bonds redeemable 
at the option of the government after the expiration 
of five years from their date of issue, and the rate 
of interest was reduced to three per cent, per annum. 

The bonds were to be sold by public subscription, at 
not less than par, and no contract or award of these 
bonds should be made by the Secretary of the Treasury 
to any syndicate, or bankers, or otherwise, until after 
the expiration of thirty days from the date of the 
announcement that public subscriptions would be 
opened for the sale of said bonds. 



The Secretary was authorized to designate banks to 
receive subscriptions for bonds so offered. 

Section 5 of this Funding Act was as follows : — 

"From and after the ist day of July, 1881, the three 
per cent, bonds authorized by this act shall be the only 
bonds receivable as security for national bank circula- 
tion, or as security for the safe-keeping and prompt 
payment of the public money deposited with such 
banks : Provided, That the Secretary of the Treasury 
shall not have issued all the bonds herein authorized, 
or so many thereof as to make it impossible for him to 
issue the amount of bonds required : And provided 
further, That no bond upon which interest has ceased 
shall be accepted or shall be continued on deposit as se- 
curity for circulation or for the safe-keeping of the pub- 
lic money ; and in case bonds so deposited shall not be 
withdrawn, as provided by law, within thirty days after 
the interest has ceased thereon, the banking associa- 
tion depositing the same shall be subject to the liabil- 
ities and proceedings on the part of the Comptroller 
provided for in section 5234 of the Revised Statutes of 
the United States : And provided further, That sec- 
tion 4 of the act of June 20, 1874, entitled 'An act fix- 
ing the amount of United States notes, providing for 
a redistribution of the national bank currency, and for 
other purposes, ' be, and the same is hereby, repealed ; 
and sections 5159 and 5160 of the Revised Statutes of 
the United States be, and the same are hereby, re- 
enacted. " 

This section was by far the most important part of 
the funding bill, and its provisions aimed to curtail 
the immense powers of the national banks. It required 
them to substitute the new three per cent, bonds, 
authorized by this bill, as security for their circulating 
notes, in lieu of the maturing bonds. 

The feature of this measure which the national banks 
regarded as the most dangerous to their existence, was 


in that part of the bill which made the bonds redeem- 
able, at the option of the government, after the expira- 
tion of five years from the date of their issue. 

This would place the power in the hands of the gov- 
ernment to discipline the national banks whenever 
these corporations would refuse to obey the laws, or 
conspire against the interests of the people. The 
bonds being redeemable, at the option of the govern- 
ment, after the expiration of five years, the latter 
could at any period after the lapse of the minimum 
time, call in those bonds deposited by the national 
banks to secure their circulation, and thus eventually 
rid the country of this gigantic money power. 

Furthermore, this section would not permit national 
banks to deposit bonds, upon which interest had ceased, 
to secure their circulating notes. Neither would it 
allow them to continue bonds on deposit upon which 
interest had ceased. Were it otherwise, the national 
banks could perpetuate their existence against the will 
of the government, by continuing on deposit bonds 
that were past due. In case of failure on the part of 
the banks to withdraw their bonds which were due, 
and upon which interest had ceased, within thirty days 
after these bonds matured, the Comptroller of the 
Currency was authorized to call in the circulation of 
those banks refusing to obey this provision, and wind 
up their affairs according: to the provisions of section 
5,234, of the Revised Statutes of the United States. 

Furthermore, the unlimited power of the banks to con- 
tract or expand the currency conferred upon them by 
section 4, of the act of June 20, 1874, was taken away 
by the proposed re-enactment of sections 5,159 and 
5,160 of the Revised Statutes of the United States. 


The re-enactment of these two sections would place 
the control of the circulating bank notes in the hands 
of the Comptroller of the Currency. 

When this three per cent, funding bill w^as before 
the House, the greatest pressure was brought to bear 
upon that body by the combined efforts of the national 
banks to secure the defeat of the measure. The halls 
of Congress swarmed with the agents, lobbyists, and 
attorneys of the money power who attempted to intim- 
idate Congress and defeat the bill. Threats were 
openly made by these venal scoundrels, that, unless the 
measure was withdrawn, the national banking money 
power would punish the country by inflicting a mon- 
etary panic upon it. 

The New York Tribune, the leading organ of this 
money power, thus described the vast power of the 
banks of the East, and hinted at its possible exercise. 
It said: — 

"The time is near when they (the banks) will feel 
compelled to act strongly. Meanwhile a very good 
thing has been done. The machinery is now furnished 
by which, in any emergency, the financial corporations 
of the East can act together on a single day's notice 
with such power that no act of Congress can overcome 
or resist their decision. " 

In its zeal to serve the purpose of the financial cor- 
porations of the East, it exposed the traitorous senti- 
ments of the financial magnates of New York City. 
It said: — 

*'It is astonishing, yea, startling, the extent to which 
faith prevails in money circles in New York that we 
ought to have a king. ' ' 

The banks of the East, in their efforts to coerce 
Congress into submission, at once commenced a rapid 


contraction of the currency during the time the bill 
was under consideration by the House. 

In the short period of thirteen days, the banks of 
New York City surrendered their circulating notes to 
the extent of $18,722,340, and conspired to precipitate 
a panic upon the country, with its accompaniments of 
bankruptcy, financial ruin, and suffering. 

This concerted action of the New York banks pro- 
duced such a flurry in the money market, that prices 
fell five, ten, and fifteen per cent, in a few moments; 
and interest at the rate of 472 per cent, per annum was 
exacted for the use of money by these infamous con- 
spirators against the human race. 

The situation in New York City became so acute, 
that the Secretary of the Treasury relieved the condi- 
tion of the people by purchasing a large amount of 
bonds, and thereby increasing the volume of money 
by many millions ; while the Canadian banks forwarded 
$8,000,000 to be thrown on the money market. 

This course of the banks led to a severe denunciation 
of their policy in Congress. 

In a speech in the House on the ist of March, 1881, 
Hon. John G. Carlisle, strongly arraigned the New 
York banks as the bitterest enemies of the government 
and the people ; he said : — 

"But, Mr. Speaker, by far the most dangerous fea- 
ture yet introduced into the national banking system 
is contained in that part of the fourth section of the 
act of June 20, 1874, which authorizes the banks at any 
time, and for any reason which they may choose 
to consider sufficient, to deposit lawful money with the 
Treasurer, contract the currency to that extent and 
withdraw their bonds ; and, sir, it is not going too far 
to say that until this feature is wholly eliminated or 


materially modified there can be no assurance of safety 
to any legitimate investment or business enterprise in 
this country. If there was ever a doubt as to the dan- 
gerous character of the power which this part of the 
law gives to the banks over the business and property 
of the people, the arbitrary and unjustifiable proceed- 
ings of the last week ought to dispel it forever. The 
power was conferred in the first instance, as I have 
said, for a special and temporary purpose, the equal- 
ization of the national bank circulation, but when the 
Resumption Act of January 14, 1875, was passed, 
which removed all restrictions as to the amount of such 
currency and made the system entirely free, there was 
no longer any necessity for this clause, and it should 
have been instantly repealed. It is a standing menace 
against the prosperity of the country. Armed with 
this destructive weapon the banks may at any time, 
without a moment's notice or a shadow of provocation, 
strike down every industry and every commercial 
enterprise of the people. 

*'The banks, or some of them at least, first began to 
pervert this section of the statute from its original pur- 
pose and abuse the power which it conferred upon 
them by depositing lawful money and withdrawing 
their bonds from time to time, in order to speculate 
upon them in the market. They thus withdrew large 
amounts of their circulation and contracted the cur- 
rency, not because the reduced demands of business 
made the outstanding volume of circulation unneces- 
sary or unprofitable, but simply because they wanted 
to realize the high premiums on their bonds and spec- 
ulate in the securities upon which the Government had 
already delivered to them 90 per cent, in notes. These 
notes would be left outstanding for the time being, but 
an equal amount of Treasury notes would, of course, be 
withdrawn from circulation and held at the Depart- 
ment to redeem the bank notes as they might come in. 
The Treasurer, in his last annual report, describes this 
process by reference to actual transactions in his office ; 
and as his statement on this subject cannot be con- 


densed without impairing its force, I give it in his 
own words. ' ' 

After quoting from the report of 1880, made by- 
Treasurer Gilfillan, Mr. Carlisle continued: — 

"Under this section the banks have it in their power 

to contract the currency and produce financial distress, 
involving every interest in the country and embarrass- 
ing the operations of the Government itself, whenever 
they may think it will promote their special interests to 
do so. If they do not like proposed legislation in Con- 
gress or elsewhere ; if they are opposed to the success 
of a particular political party; if they conclude that 
they ought to be exempt from all taxation, State and 
Federal; if they want additional privileges conferred 
upon them in respect to any matter connected with 
their business; in short, if their opinions and interests 
are not consulted in all cases, whatsoever, they can 
resort at once to this tremendous power over the for- 
tunes of the people and thus bring the timid to terms 
and ruin all who refuse to accede to their demands. 
A plausible pretext can always be found or invented 
for the exercise of such a power as this, and powerful 
influences can always be brought to justify and sus- 
tain it. 

"The two Houses of Congress, representing the 
aggregate interests of fifty millions of people, have, 
after mature deliberation, passed a bill which the 
banks have chosen to consider obnoxious to them, and 
forewith — within thirteen days — they have contracted 
the currency to the extent of $18,722,340 and precip- 
itated a crisis which would have been disastrous to the 
country had it not been met by measures which they 
had no power to prevent. The prompt action of the 
Secretar}^ of the Treasury in purchasing a large amount 
of bonds at the city of New York, and the course of 
the Canadian banks in throwing seven or eight million 
dollars of their loanable capital on the market, alone 
prevented a catastrophe from the effects of which we 
might not have entirely recovered for many years. 


"When Secretary McCulloch, several years since, in 
pursuance of his contraction policy, began to retire 
and cancel legal tender notes at the rate of $4,000,- 
000,000 per month, it produced such consternation in 
business circles that Congress was forced to intervene 
at once and arrest the process by the passage of a joint 
resolution; but now we have seen nearly $19,000,000 
of circulation withdrawn in less than half a month, not 
by the Government, but by institutions in the manage- 
ment of which the Government has no voice, and still 
gentlemen here insist that the power under which this 
has been done, and under which it may at any time be 
repeated, shall not be taken away. Why, sir, the whole 
contraction of legal tender Treasury notes under the 
provisions of the Resumption Act, from January 14, 
1875, to May 31, 1878, when it was prohibited by law, 
was only $34,318,984, not twice as much in more than 
three years as the bank contraction had been in less 
than two weeks. 

"This experience warns us that we cannot safely 
permit this great power to remain in the hands of these 
institutions unchecked by legal restrictions. ' It is an 
engine of destruction standing in the very narrowest 
part of the way to permanent industrial and commer- 
cial prosperity in this country ; for there can be no such 
prosperity anywhere, in the midst of sudden and enor- 
mous contractions of the currency; nor will prudent 
and experienced business men embark in large and 
expensive enterprises when the power to make such 
contractions is held by private and interested parties 
who acknowledge no restraints except public senti- 
ment and their own views of the public welfare. 

*'By law the volume of legal tender notes is limited to 
$346,681,016, while under the policy of the Govern- 
ment nearly $150,000,000 in gold and silver coin are 
permanently withheld from circulation and hoarded in 
the Treasury. Of the $454,000,000 gold coin in the 
country the Government and the banks held, on the 
I St davof November last, $254,000,000, and the people 


only $200,000,000. The circulation of State banks is 
taxed out of existence ; the coinage of silver is limited 
by statute to $4,000,000 per month ; and so it appears 
that by statute or public policy every form of currency 
which the people can use in the transaction of their 
business is restricted, except national bank notes. 
They alone are perfectly free from all restictions, legal 
or otherwise, and upon them the people are compelled 
to rely under existing circumstances for the additional 
facilities of exchange necessary to enable them to 
carry on their growing industries and conduct their 
rapidly increasing commercial enterprises. 

"What a fatal policy it is, in view of these consider- 
ations, to retain on the statute book as part of our 
currency system a law which subjects all these great 
interests to the arbitrary will or mistaken judgment 
of two thousand corporations. ' ' 

The dangerous powers conferred upon the national 
banks were so clearly pointed out by Mr. Carlisle in 
his magnificent speech that the bill passed the House 
by a decisive vote. 

In the meantime, the policy of the banks in making 
war upon the public credit received criticism from 
many journals which were friendly to the national 
bank system. 

We will quote a few extracts : — 

"It is a question whether a clique of bankers is to 
dictate to Congress and the country what is for the 
best interest of the country, and to manipulate the 
money market in order to depress the stock market. ' ' 
— New York Advertiser. 

"It is rule or ruin with the national banks. When 
Congress gets down on its honorable knees to the 
national banks everything will be lovely. Fattening 
on the Treasury for years, the national banks have 
entered into a conspiracy to wreck the business of the 
country rather than submit to what they consider 


unfavorable legislation. The people will remember 
this against them, and the day of reckoning is not as 
far off as they imagine. " — Chicago News. 

"Some of the national banks of this city have played 
a very contemptible part in the flurry of yesterday and 
to-day. It is not the first time that they have acted in 
this way against the public credit. In one instance, 
which we do not care to name at present, but which will 
be understood by most Wall street people, the want of 
loyalty to the public credit has shown itself on all occa- 
sions, from the outbreak of the civil war in 1861 down 
to the present time." — New York Commercial. 

"It is understood that there is to be an amendment 
offered in the House to the bill providing for the issue 
of greenbacks to take the place of bank circulation 
that may be withdrawn. If this sensible precaution 
is taken it will instantly restore confidence and take 
permanently away from the banks this fearful power 
to withdraw in one day all their bills from circulation, 
or, what is worse, lock up an equal amount of gold and 
legal tenders and leave the street utterly without 
means of doing business. Such terrible power no set 
of men should for one instant possess. " — New York 

The New York Tribune uttered the following im- 
plied threats against Congress should the bill pass. It 
said : — 

"The country knows that it has escaped a great dis- 
aster. Everywhere there is a feeling of intense relief 
and thankfulness, as substantial people come to realize 
how terrible a revulsion the enactment of the Carlisle 
section would have caused. But it is not well to forget 
that the danger has been escaped only upon condition 
that the fatal section is defeated. If Congress or the 
President is led to believe that disaster has been and 
can be averted by any action of the Treasury Depart- 
ment, so that the pending bill can now be passed with- 
out causing a great calamity, the consequences of that 


error may be incalulably disastrous. Let the situation 
be fully understood. ' ' 

The toryism of the Tribune always shone forth con- 
spicuously when it defended the lawless banks of New 
York City. 

"The trade and general business of the country has 
been subjected to a strain during the past week more 
severe than any which has been put on them since 
1873. This deplorable state of affairs was brought 
about by the selfish conspiracy of a certain number of 
national banks bent on opposing the national will in 
the matter of establishing a lower national rate of inter- 
est by such duly chosen representatives of the people 
of the United States as they have thought proper to 
adopt. Our Government and people who maintain 
it have submitted to great sacrifices to afford all rea- 
sonable support to national banks. But the banks 
have not kept within the reasonable limits of their 
demand for compensation for such financial services as 
they have been able to render the country. 

"A few of these banks have not hesitated to invite the 
destruction of the whole system and provoke popular 
anger by pursuing a course which must inevitably force 
on American citizens the question whether legislative 
and executive officers chosen to represent the people or 
a few bank officers are to administer the financial des- 
tinies of this country. It is not probable the natural 
resentment of the legislature against the attempted 
conspiracy will extend to the condemnation of the 
whole national system. But we have no doubt at the 
same time that when the indignation has cooled off, 
those conspirators against the prosperity and credit 
of the Republic will be subjected to such temperate 
and wholesome discipline as shall be a warning to 
them and their kind for years to come." — New York 

"It strikes us that the gentlemen in Wall street, who 
are trying to prevent the Senate Funding Bill from 


becoming a law, rather make a mistake. Undoubtedly 
they have a right to express their opinions about the 
bill, but when it comes to threatening that, unless it is 
modified to meet their views, they will wreck the 
trade of the entire country, they go a step too far. 
The average Congressman has no such fear of banks 
and bankers as to make him alter his vote to avoid 
their displeasure, and as to any possibility of the mis- 
chief they may do, he will soon find a way to prevent 
it. If the officers of the banks should attempt, as 
some foolish men here say they will do, to withdraw 
their circulation unless certain provisions in the bill 
are stricken out, it would be very easy to supply the 
deficiency with an additional issue of greenbacks, and 
if they try by underhand means to thwart the negoti- 
ation of the new bonds because the rate of interest is 
not high enough to please them, they can be deprived 
of the privilege of issuing circulation altogether. 

"It is a dangerous thing for the tail to attempt to 
wag the dog, for if the dog gets angry he can switch 
the tail about in a very unpleasant way for the tail. 
The truth is, that in matters of national interest there 
is no set of people as stupid as the Wall street financiers. 
Absorbed in the business of buying and selling stocks 
and lending money, they only consider what immedi- 
ately effects to-day's markets, without a foresight of 
the future or regard for what is going on elsewhere. 
In the present case they are evidently in blissful ig- 
norance of the general hostility of the people of the 
West and Southwest to the national bank system and 
the slender thread of toleration on which it hangs. It 
needs only a good pretext to secure the sweeping of 
the whole thing out of existence, and the substitution 
for it of any exclusive national currency. That pre- 
text all the Wall street bankers seem bent on furnish- 
ing, and Washington will, we fear, be only too glad to 
seize upon it." — New York Sun. 

On March i, 1881, the Chicago Express, which 
opposed the pretensions of the national banks, editor- 
ially spoke as follows: — 


**The funding bill, as it passed both Houses of 
Congress, was, in the language of a Washington dis- 
patch, 'The most serious blow the national banks ever 
received from Congress since the organization of the 
national banking system. ' 

"The act of January, 1875, clothed the national 
banks with the power of unlimited and unrestricted 
contraction and expansion of the currency. It gave 
them absolute control over the volume of money, and 
consequently over the market value of labor and all 
kinds of property. It gave them power to inflate 
the currency when they could make money through 
the inflation of prices, and when their interests could 
be better served by panic, depressed prices and general 
business stagnation and bankruptcy, they had power 
to accomplish their end through the contraction of 
their circulating notes. 

"The provisions of the new funding bill materially 
interfere with their nicely-planned scheme, and de- 
prive them of nearly all their power over sudden con- 
tractions and inflation. It puts a limit to their privi- 
leges, and bounds to their unwarranted powers. 

"Without waiting even for the concurrence of the 
House in the slight vSenate amendments, a large and 
powerful bank lobby from Wall street and the clearing 
house association at once bore down upon the White 
House armed with magazines, Gatling guns and infer- 
nal machines of dire calamities, which they threatened 
would surely explode in the very heart of the nation's 
business and industries from spontaneous ignition, in 
case he did not interpose his prerogative to save. They 
were armed with authority from the national banks 
represented by the American Bankers' Association to 
inform his Excellency that in case he withheld his veto 
they would immediately retire their circulation, in 
which case a money stringency would follow which 
would be terribly disastrous to every business interest 
producing the most ruinous financial crash which ever 
befell the country. ' ' 


Senator Plumb, who was one of the three repub- 
lican Senators that voted for the bill, stated his opinion 
as follows : — 

"I am a national bank president, so I can speak 
without prejudice. I tell you the crisis has come when 
we shall see whether the banks run the Government 
or the Government the banks. I think the Govern- 
ment has a right to fix the rate of interest it will pay, 
and it is no business of any set of men. It makes no 
difference to the people if Wall street gamblers do lose 
money, or railroad stocks stop rising. It would make 
a difference if the hoes in western cornfields should 
stop, and it is with the producers that the prosperity 
of the country rests. Let the bottom fall out of it if 
it will. It is an artificial movement to coerce the Gov- 
ernment. ' ' 

The funding bill passed Congress, and was presented 
to President Hayes, who, on March 3, 1881, returned 
the bill to the House of Representatives with his veto, 
accompanied by a message stating his objections to the 

The following extracts from the message will give 
the reader a correct opinion of the influence that forced 
the President to veto this measure, which was the 
result of the matured labor of Congress. The Presi- 
dent says: — 

*' While in my opinion it would be wise to authorize 
the Secretary of the Treasury, in his discretion, to 
offer to the public bonds bearing 3^ per cent, interest 
in aid of refunding, I should not deem it my duty to 
interpose my constitutional objection to the passage of 
the present bill if it did not contain in the fifth section 
provisions which, in my judgment, seriously impair 
the value, and tend to the destruction of the present 
national banking system of the country. 

"This system has now been in operation almost 


twenty years. No safer or more beneficial banking 
system was ever established. Its advantages as a 
business is free to all who have the necessary capital. 
It furnishes a currency to the people which for con- 
venience and the security of the bill holder has prob- 
ably never been equaled by that or any other banking 
system. Its notes are secured by the deposit with the 
government of the interest-bearing bonds of the United 

Further on in his veto message, President Hayes 
makes vigorous objections to section 5 of the act, on 
the grounds that it jeopardized the existence of the 
national banks, and there would be no inducement for 
the organization of additional ones. 

He says: — "In short, I cannot but regard the fifth 
section of the bill as a step in the direction of the de- 
struction of the national banking system. ' ' 

Again he says: — "Under this section it is obvious 
that no additional banks will hereafter be organized, 
except, possibly, in a few cities or localities where the 
prevailing rates of interest in ordinary business are 
extremely low. ' ' 

The extreme solicitude manifested by the President 
for the national banks is apparent. 

Thus the timid Hayes quaked before this august 
banking monopoly, and vetoed this beneficial measure 
at the insolent command of an organized clique, whose 
greed was not even satiated with 472 per cent, usury. 

Furthermore, this bill would have resulted in a sav- 
ing to the Government of many millions per annum 
by a reduction of the rate of interest. 

It will subsequently appear that these bankers who 
threw the country into a state of panic ; who threatened 
Congress; who forced the weak Hayes to veto this 


bill ; who wanted a king, will, in the near future, con- 
stitute themselves the special guardians of that most 
sacred object — the public credit! 

These conspirators, who prevented a reduction in the 
interest on the public debt, will, in a few years from 
this period, assume the championship of the public 

In the meantime, that powerful ally of the money 
power, the Secretary of the Treasury, was throwing 
the weight of his official influence against the silver 

In one of his reports to Congress, he makes the fol- 
lowing recommendation with reference to the silver 
dollar; he says: — 

'*The Secretary believes that all the beneficial 
results hoped for from a liberal issue of silver coin by 
issuing this coin, in pursuance of the general policy 
of the act of 1853, in exchange for United States notes, 
coined from bullion purchased in the open market, by 
the United States." 

An analysis of this recommendation, in view of the 
resumption act of 1875, will illustrate the enmity of 
Secretary Sherman toward the use of silver as a stand- 
ard money. 

First, He would limit all silver coins, whether dol- 
lars or otherwise, as. a legal tender, to the amount of 
five dollars. Second, With this limited legal tender 
silver coin he would redeem and retire the United 
States legal tender notes. Third, He would redeem 
said silver coin in what? — In gold. And that would 
be the sole redemption money. 

This policy of the Secretary aimed at the complete 
withdrawal and cancellation of $346,000,000 of legal 


tenders, by a redemption in silver coin, the latter 
redeemable in gold. 

This scheme of contraction would be followed by 
continual issues of bonds to secure gold for a redemp- 
tion fund for this silver. 

It will be noticed that this man, who was so anxious 
to make United States notes and silver coin redeem- 
able in gold, never, during his public career, once 
intimated that national banks should redeem their 
circulating notes in gold. 

In 1880, Secretary Sherman again inflicted one of 
his usual recommendations on Congress, asking for 
the passage of a law to prohibit the further coinage of 

We quote his exact language in which he avers : — 

"First, It is too bulky for large transactions, and its 
purpose is confined mainly for payments for manual 
labor, and for market purposes for change. The 
amount needed for these purposes is already in excess 
of the probable demand. 

"Second, It is known to contain a quantity of silver 
of less market value than the gold in gold coin. 

"This fact would not impair the circulation of such 
limited amount as experience shows to be convenient 
for use, but it does prevent its being held or 
hoarded as reserves, or exported, and pushes it into 
active circulation, until it returns to the Treasury, as 
the least valuable money in use. 

"For these reasons the Secretary respectfully but 
earnestly recommends that the further compulsory 
coinage of the silver dollar be suspended. ' ' 

The phrase "compulsory coinage" clearly indicates 
the hostility of the Secretary toward silver. 

An examination of his reasons, urging the suspension 
of the coinage of the silver dollar, furnishes the 
strongest argument against his position. 


In the first place, the silver dollars are too heavy for 
large transactions, therefore this fact places them 
beyond the control of the national banking money 

The gold gamblers and bullion brokers of Wall street 
found it difficult to obtain control of those coins whose 
largest denominations were one dollar pieces. 

At the very time that Secretary Sherman urged this 
objection against the silver dollar, the inconvenience, 
if any, of its size and weight was obviated by the issu- 
ance of silver certificates in denominations of from ten 
to one thousand dollars. 

He says that it was the money of small transactions, 
such as the payment of wages to labor, and the pur- 
chase of provisions. 

This is one of the strongest reasons that could be 
advanced for the continued coinage of the silver dollar. 
This money that paid the wages of labor was worth 
one hundred cents on the dollar. 

Again, he says that it was of less market value than 
the gold in the gold dollar. This is true of it as a 
mere commodity, but as a legal tender, a medium of 
exchange, it was the equal of gold anywhere on the 
face of the earth. 

But the true animus of the Secretary against the 
silver dollar sprung from the fact that it was not held, 
or hoarded, or exported, but that it was in active cir- 

This is the first time that an American Secretary of 
the Treasury advocated a theory as absurd as the one 
urged by Mr. Sherman. 

The principle upon which a true monetary system is 
based is that of circulation. 


Mints are not established to coin money for the pur- 
pose of hoarding it up in the vaults of banks. It per- 
forms its true functions when it passes from hand to 
hand in exchange for the commodities and necessaries 
of life. 

One hundred and fifty years ago the celebrated his- 
torian and philosopher, David Hume, in speaking of 
the effects of hoarding money, said: *'As regards 
prices, money locked up in chests is as if it were anni- 

He says, "It is not exported. " 

Just why Secretary Sherman desired a coin that can 
be readily exported to some foreign country, is not 
stated by him in his report and recommendations to 

The objections urged against silver because of non- 
export of that coin, shows that it could not be readily 
shipped and re-shipped across the Atlantic, at the nod 
and beck of the stock gamblers, bullion brokers and 
panic breeders of the New York clearing house and 

The Secretary said, "It is in active circulation." 

This constitutes no crime on the part of silver. All 
money is coined or issued to subserve the purposes of 
man by being thrown into active circulation as a 
medium of exchange. 

These weak and puerile reasons of Secretary Sher- 
man against the continued coinage of silver dollars 
had no effect upon Congress. They were contemptu- 
ously ignored by that body. 

The childish spite exhibited by Secretary Sherman 
against silver, his petty slanders against the standard 
dollar, and his slavish devotion to the traitorous money 


power, disgusted many of the best men of the party 
to which he belonged; and, on March 30, 1880, the 
Chicago Tribune administered a stinging rebuke to his 
policy. It said: — 

"Since the passage of the silver law Mr. Sher- 
man has done everything to disparage silver; he 
has limited the coinage to the minimum ; he refused 
to exercise the Government's option to pay out silver 
in any considerable amounts; he has restricted the 
issue of silver certificates; he made the Treasury 
Department a member of the New York Clearing 
House, from which silver is excluded; and has by word 
and letter and act done all in his power to discourage 
the use of silver in the United States. ' ' 

The Tribune denounced his truckling policy on the 
financial question in the following language: — 

"At the opening of the present Congress he made the 
extraordinary recommendation that Congress strike 
from $350,000,000 of the greenback currency of the 
country its legal tender character. It was a high bid 
for the support of Wall street, but a fatal one addressed 
to the producing and industrial classes of the country. " 
In the same editorial the Tribune says: — 
"It is highly improbable that Mr. Sherman would 
receive an electoral vote from any State between the 
Alleghany and Rocky Mountains upon the issues of 
abolition of silver money and demonetization of green- 
backs which would involve a contraction of the coin and 
paper legal tender currency exceeding $400,000,000, 
which would produce ruin to every industrial interest 
and every legitimate enterprise. * ' 

The public career of John Sherman is the most re- 
markable in the annals of the nation. 

When a young man, he turned his attention to the 
profession of the law, in which he earned but meager 
fame and fortune. At this time he was a compar- 


atively poor man. After a brief, or rather briefless 
experience as a lawyer, he determined to enter public 
life and was elected to the Thirty-fourth Congress in 
1854. After serving in the lower House until the 
outbreak of the war, he was elected to the United 
States Senate. During the fore part of his career in 
that body, he served as Chairman of the Committee 
on Finance, the most important and influential position 
that can be conferred upon a member of the Senate. 

He is the author of the present system of national 
banks, and he has left his impress upon the various 
financial measures of the Government from 1861 to 


On the accession of Hayes to the Presidency, he was 
appointed Secretary of the Treasury at a salary of 
$8,000 per annum. 

During his term of office at the head of that great 
department, he was a firm friend of the national bank- . 
ing money power which continually waged a war of 
extermination upon the currency of the United States. 

As Secretary of the Treasury he executed those great 
funding operations, by which it was alleged the 
people had been saved a vast sum in interest, notwith- 
standing the singular fact that, during his incumbency, 
the national banks persuaded President Hayes to veto 
the funding bill, which reduced the rate of interest 
upon the national debt. 

During these funding operations, he selected various 
national banks as depositories for the money received 
from the sale of bonds. One of these banks was known 
as the First National, situated on Broadway, in New 
York City. It had a capital of $500,000 and occupied 
offices that were humble compared with the palatial 


quarters of the great financial institutions of that city. 
According to the sworn statement of the officials of 
this bank, its total capital was $500,000 on the 31st day 
of December, 1879; o^ January i, 1878, the undivided 
profits, after the payment of dividends, were $142,670; 
on April 4th of the same year the undivided profits 
were $339,095.60; on June 14th, after the lapse of two 
months, the undivided profits were $579,018.88; on 
October 2d, these profits reached the sum of $804,- 
511.26; on December 12, 1878, they were $267,700.84. 
The amount of dividends paid by this bank to its 
stockholders, during this time, has never been ascer- 
tained or disclosed, but that it was very large admits 
of no doubt. 

Here is a single national bank, the special prot^g^ 
of Secretary Sherman, that, in the short space of ten 
months, accumulated undivided profits which exceeded 
jts capital stock by more than three hundred thousand 

On January i, 1878, this pet bank of the Secretary 
was the custodian of Government funds amounting to 
$24,759,948.50. On April 4th, of the same year, it 
held Government funds amounting to $69, 927,704.43; 
on June 14th, these deposits were increased to $128, - 
109,071.04; on October 2d, they were $3,601,550. It 
was from these deposits of Government funds that the 
bank accumulated those enormous undivided profits. 
Why this comparatively small bank should be made 
the depository of Government funds to two hundred 
and fifty-six times its capital has never been explained 
by Secretary Sherman. 

At this time, the sub-treasury of the United States 
was situated in the same city as this pet bank, and 


could have been utilized as a depository for this money. 
It will be seen that this bestowal of official favor 
upon this bank was worth the immense sum of twenty- 
one thousand dollars per day. 

The figures with reference to the amount of undivided 
profits of the bank, and the amounts of public money 
deposited therein, are taken from the report of the 
Comptroller of the Currency for the year 1880. 

On January i, 1880, Senator Beck, of Kentucky, 
called the attention of the Senate to these astonishing 
facts, and in the course of his speech said : — 

"I came to the conclusion, looking over these state- 
ments, that the best banking capital a man can have is 
the good will of the Secretary of the Treasury. Sup- 
pose the Senator from New York were the best banker 
and I were to go to him and say, 'I want to go into 
partnership with you, ' and the Senator should say to 
me, 'What capital have you got?' — 'None.' 'What do 
you propose to do?' — 'I propose to bring you the good 
will and the deposits of the Secretary, ' I think the 
Senator would take me into partnership, and he would 
make more money by doing it than he ever made in 
his life, and we would contribute largely to any cam- 
paign fund desired by the Secretary. " 

At the time when this bank was made, the custodian 
of these fabulous sums of public money, John Thomp- 
son, a large stockholder, was its vice-president. He 
was informed that this bank with a capital of only 
$500,000 had subscribed as a purchaser of four per cent, 
bonds to an amount exceeding thirty millions of dol- 
lars. When acquainted with this fact, Mr. Thompson 
protested against the assumption of such a risk, and 
said : — 

*'If these bonds were to fall in value one per cent, it 
would wipe out three fifths of our capital. If they 


should fall two per cent. , it would absorb more than the 
entire capital of the bank. ' ' 

Mr. Thompson was assured by its president that 
there was no danger incurred, because of an agree- 
ment with the Secretary of the Treasury that the 
bank, in that case, would not be compelled to pay for 
the bonds. Mr. Thompson w^as astounded at this 
information, and he sold his stock in the bank, with- 
drew from its directory and organized the Chase 

During the administration of Secretary Manning, 
the Treasury Department deposited sixty-three million 
dollars with the various national banks of New York 
City. At that time Mr. Sherman was in the Senate 
and denounced the act of Mr. Manning in the strong- 
est language. Yet, Secretary Sherman had, while he 
was at the head of the Treasury, deposited more than 
four times that sum in a single bank. 

During the entire public career of Mr. Sherman as 
Representative in Congress, as United States Senator, 
and as Secretary of the Treasury, he was not engaged 
in any other business. With the exception of the four 
years that he was Secretary of the Treasury, during 
which he received eight thousand dollars per annum, 
his official yearly income never exceeded five thousand 

In a letter to one of his political friends in the State 
of Ohio, Mr. Sherman details the immense sacrifices 
he had made for the public during the forty years 
that he was its servant. He stated that his living 
expenses annually averaged ten thousand dollars dur- 
ing that time, and that his official income never 
equaled his expenditures. 


At the time of the writing of that letter, his resi- 
dence in Washington was a palace whose sumptuous- 
ness rivaled that of the crowned heads of Europe. In 
addition, he was one of the most extensive owners of 
real estate at the capital. He is a very large holder 
of stocks in national banks and railroad corporations. 
The miraculous process by which a high official of the 
Government can expend twice the amount of his salary 
for or.dinary expenses during the early part of his 
political career — at which time he was a poor man — 
and yet accumulate a magnificent fortune out of the 
surplus, has long been a mystery, for the solution of 
which Mr, Sherman has volunteered no explanation. 
His accumulation of millions evinces a degree of thrift 
that is wonderful ; and the facts in the career of Sen- 
ator Sherman surpass the fabulous story of King Midas, 
whose touch turned everything to gold. 

Yet this man is revered by the national banking 
money power and its satellites as the ablest American 
financier of the age. 

Since 1861, he has been on every side of nearly every 
political and financial question that has agitated the 

To illustrate the facility with which he can change 
his position on public questions, we refer to his late 
action on the policy of the United States toward the 
recognition of Cuban Independence. In the month of 
January, 1897, he introduced a fiery resolution in the 
Senate demanding the speedy recognition of Cuban 
belligerency. He out-jingoed the Jingoes. Three 
days afterward, he withdrew said resolution, with the 
lame explanation that its adoption would be inexpedi- 
ent at that time. 


The profits of the national banking system up to 
and including the year 1880 were immense. 

In a report of the Comptroller of the Currency for 
1 88 1, this official states that the net earnings of the 
national banks for the preceding twenty years were 
$512,825,325, besides a surplus of $130,000,000 — the 
whole aggregating $642,825,325; and that this enormous 
profit was earned upon an average capital of $500,000,- 
000, — a net profit of over twelve per cent, annually 
above all expenses, including the princely salaries paid 
to the executive officers of the respective banks. 

It will be asked, why should these financial institu- 
tions so often seek to bring on stringencies in the 
money market? The reason is clear to those who 
understand what class of men are at the head of the 
powerful national banks of New York City and other 
speculative centers. An examination of the directories 
of these great banks exhibits the startling fact, that 
the executive officers, directors, and heavy stockhold- 
ers of these institutions are the largest operators on the 
Stock Exchange. 

Having control of almost unlimited amounts of 
money, they are enabled to depress the value of stocks, 
bonds, and other securities when they are buyers on the 
market ; and can enhance the value of stocks held by 
them when desirous of selling. Thus they are em- 
powered to wreck the fortunes of the smaller operators. 

The entire property of the nation, both real and per- 
sonal, is at the absolute mercy of these national bank 
money kings. The men, or combination of men, who 
control the volume of money of a nation are its mas- 
ters, whether it is an absolute, or a constitutional 
monarchy, or a republic. 


It is a recognized principle of finance, that the volume 
of money afloat in a country fixes the general level of 
prices of commodities ; it is true that there are some 
exceptions to this general rule, but they arise from 
unusual and unforeseen circumstances. 

The power of the national banks to suddenly con- 
tract the circulating medium of the country, and the 
tyrannical manner in which they have exercised that 
privilege in the past, has awakened the gravest ap- 
prehension of the thinking men of the nation. 

In his report of 1880, Treasurer Gilfillan stated that 
the national banks since the 20th of June, 1874, up to 
the time of his report of 1880, had surrendered their 
circulation in a sum exceeding $85,000,000, by deposit- 
ing legal tender notes for the redemption of their cir- 
culating notes. 

In addition to this contraction spoken of by the Treas- 
urer in this report, the national banks possessed addi- 
tional means of creating a sudden scarcity of money. 
Besides the circulating notes which these banks were 
authorized to loan as money, they controlled deposits 
of more than a billion dollars. 

Therefore the loanable funds of these banks could 
be transformed into a most deadly weapon against the 
legitimate enterprise of the nation. 

All that was necessary to bring on a monetary panic 
was a concerted plan on the part of these banks to call 
in their loans, and this action w^ould be followed by a 
crisis as surely as night follows the day. 



*'The abandonment of silver will result in the en- 
hancement of the burden of all debts and fixed 
charges, acting as a drag upon production, and suffo- 
cation, strangulation, are words hardly too strong to 
express the agony of the industrial body when em- 
braced in the fatal coils of a contracting money." — 
Francis A. Walker. 

*'Many of our rich men have not been content with 
equal protection and equal benefits, but have besought 
us to make them richer by act of Congress. By 
attempting to gratify their desires we have, in the 
results of our legislation, arrayed section against 
section, interest against interest, and man against 
man in a fearful commotion which threatens to shake 
the very foundation of our union. 

"It is time to pause in our career; to review our 
principles, and, if possible, to revive that devoted 
patriotism and spirit of compromise that distinguished 
the sages of the Revolution and the fathers of our 
union. If we cannot at once, in justice to interests 
invested under improvident legislation, make our 
Government what it ought to be, we can at least take 
a stand against all new grants of monopolies and 
exclusive privileges; against any prostitution of our 
Government to the advancement of a few at the 
expense of the many, and in favor of compromise and 
gradual reform in our code of laws and system of 
political econom3^" — Andrew Jackson. 

In the presidential campaign of 1880, the two great 
political parties arrayed themselves against each other 
in this contest with the utmost zeal. 

The National Republican Convention met in Chicago 



on the 26. of June, 1880. Among the leading candi- 
dates striving for the nomination for President were 
John Sherman, General Grant, and James A. Garfield. 
After a long contest, lasting seven days, the latter 
received the nomination. The Vice- Presidential can- 
didate was Chester A. Arthur, of New York. 

The Republican nominee for President had seen 
long service in the House of Representatives, where 
he was conspicuous as the champion of the national 
banking system, and as an advocate of the single 
standard of gold. 

On the 27th of June, 1880, the Democratic National 
Convention met in Cincinnati, and its deliberations 
resulted in the nomination of Major-General Winfield 
S. Hancock for President, and William H. English, of 
Indiana, for Vice-President. 

The Democratic nominee was one of the most illus- 
trious soldiers in American history. 

During the late civil war he was the most conspic- 
uous corps commander in the Northern armies, and 
with his command, the famous Second corps of the 
Army of the Potomac, met and vanquished the flower 
of the Confederate armies on many hard fought fields. 

General Hancock had endeared himself to the Dem- 
ocratic party by his manly course as militar}^ governor 
of Texas, during which he patriotically maintained 
the rights of the people of that State against the 
rapacity of the notorious Pease — the civil governor. 

His private character was absolutely unassailable. 

During the campaign the organized national bank- 
ing money power joined its forces with all other privi- 
leged interests, and thus a mighty influence was 
exerted to secure the election of Garfield to the Presi- 


The battle cry of the Republican party in this notable 
contest was "A solid South against a solid North." 

The money power joined in the senseless hue and 
cry, and by playing upon the smouldering prejudices 
of the people growing out of the late war, and by 
seeking to reopen the festering wounds of sectional 
hate, aimed to control the election and consequently 
the financial policy of the Government. 

Owing to the dissensions of the New York State 
democracy, which grew out of the gubernatorial 
election of 1879, and which were not healed, and the 
lavish use of money, the Republican candidates were 

After the 4th of March, 1881, the Republicans had 
full control of the Government, and there was no 
obstacle in their way to hinder or obstruct the execu- 
tion of their policy. 

William Windom, of Minnesota, was selected by 
President Garfield for the post of Secretary of the 

After the adjournment of Congress in the early part 
of 188 1, Secretary Windom and the bond-holders mutu- 
ally agreed that the bonds bearing five and six per cent, 
interest then maturing, should be refunded at three 
and one-half percent, payable at the option of the 

This action of Secretary Windom had no authority 
in any law then existing, and was an unwarranted 
assumption of the constitutional power of Congress by 
an executive officer. 

The usurpation of legislative power by the Secretary 
of the Treasury was tolerated for the reason that it 
saved the Government a large amount of interest ; 


nevertheless, Congress, at its next session, sharply 
criticised Mr. Windom for this exercise of arbitrary 

The action of the bond-holders in voluntarily accept- 
ing a lower rate of interest than their contracts called 
for excited a great deal of comment at the time. 

The supporters of the national banking money 
power never wearied of pointing at this sacrifice by 
the national creditors as a remarkable example of 
patriotism, and asserted that the bond-holders and 
national banks were not as dangerous to the liberties 
of the people as their opponents declared them to be. 

This apparent sacrifice of millions of interest annu- 
ally was a rare stroke of policy on the money power. 
The shrewd men at the head of the national banking 
system were thoroughly acquainted w4th those traits 
of character which distinguished the American people 
from all others of modern times. 

They knew that we, as a people, look to the events 
of to-day and do not worry with apprehensions for the 
future. Moreover, the country had entered upon a 
career of prosperity, the tendency of which was to 
make the people forgetful of the wrongs heaped upon 
them in the past by the present banking system. 

According to the provisions of the national banking 
law of 1863, the charters of the national banks 
would expire in 1884, and the time seemed propitious 
for this money power to carry into execution the next 
step of its policy — which was to obtain the passage of 
a law through Congress extending the franchises of 
the national banks. 

Therefore, during the time that the fears of the 
people were temporarily allayed by the voluntary 


acts of the bond-holders and banking interests in accept- 
ing a lower rate of interest on their bonds, the national 
banking money power seized this golden opportunity 
to secure an extension of their system. 

Hence, at the next session of Congress, in 1882, Mr. 
Crapo, of Massachusetts, introduced a joint resolution 
authorizing national banking associations to extend 
their corporate existence for the period of twenty 
years. The speeches made against its passage were 
very able, notably those of Representatives Carlisle 
and Culberson. 

So powerful was the opposition against an extension 
of the national banking system that the Democratic 
minority succeeded in engrafting a section upon the 
resolution, by which the circulating notes of national 
banks could not be surrendered to an amount ex- 
ceeding $3,000,000 per month. 

This curtailed the power of the banks to suddenly 
contract the volume of currency, by surrendering up 
for cancellation large amounts of their circulating 
notes, a practice to which they had resorted many times 
in the past twenty years. 

During the debate upon this resolution it was shown 
by the opponents of the national banking system that the 
New York Clearing House Association had conspired 
against the constitutional power of Congress, by refus- 
ing to accept silver dollars and silver certificates ; that 
this association of national banks held themselves 
superior to the law, and arrayed themselves in solid 
phalanx against the financial interests of the people. 

It was further shown that the power of the national 
banks was so great that they had the means to unsettle 
business throughout the country, and that every panic, 


from which the country suffered since the close of the 
war, was originated by these banks. 

By an additional amendment to the resolution it was 
made compulsory on the part of the clearing house 
associations to accept silver certificates in settlement 
of balances. 

Again, the privilege of the national banks to institute 
suits at law in the Federal courts, as courts of original 
jurisdiction, was taken away, and this means of drag- 
ging litigants hundreds of miles from their homes at 
immense sacrifice of time and money, was denied 
to these corporations, which heretofore was one of 
their most tyrannical means of harassing individuals. 

Therefore it will be seen that the sturdy opposition 
of the Democratic minority in the House had succeeded 
in extracting a few of the sharpest fangs of the greedy 
national banking money power. 

As amended, the resolution passed the House and 
was transmitted to the Senate. 

During the Senate debate on the joint resolution 
to renew the charters of the national banks. Senator 
Voorhees eloquently and truthfully depicted the vast 
bounties that had been bestowed upon these creatures 
of the Government. 

He pointed out the overshadowing influence of the 
national banking power. 

On June 19th, 1882, he said: — 

**A brief glance at the conduct of the banks during 
the last year and a half is all that I can indulge in at 
this time, but it is sufficient to prove the truth of what 
I say. 

"In the closing days of the last Congress and of the 
last Administration the banks precipitated an issue 
upon the people which ought not to be forgotten on an 


occasion like this; an issue so full of danger to consti- 
tutional liberty that it ought to be faithfully remem- 
bered now that they are asking a new and indefinite 
lease of power. 

"It is now twenty years ago that this Government 
first engaged in building up, fostering, and encourag- 
ing the present vast and overshadowing system of 
national banking. 

"No favor ever demanded by the banks has ever 
been withheld, no privilege denied, until now they 
constitute the most powerful moneyed corporations on 
the face of the globe. Congress has heretofore on 
nearly all occasions abdicated its powers under the 
Constitution over the finances of the banks, except 
when called upon to legislate in their favor. They 
have demanded the violation of legislative contracts 
with the people, and the demand has been granted, 
whereby their own gains and the people's burdens have 
been increased a thousand fold beyond right and 
justice. They have demanded the remission of all 
taxation on their bonds, and it has been conceded, 
thus leaving the poor to pay the taxes of the rich. 
They have been fortified in their strongholds of 
moneyed caste and privilege by double lines of unjust 
laws, supplemented with here a redoubt and there a 
ditch, to guard them from the correcting hand of pop- 
ular indignation, until now, deeming themselves 
impregnable, they bully and defy the Government." 

He continued as follows : — 

"Sir, with full and unrestricted power over the vol- 
ume of the currency and, consequently, over all values 
conceded to the banks, together with ample machinery 
by which in an emergency they can defy the passage 
of any act of Congress, what is left to the Government 
except an abject submission? This Government could 
not, to-morrow, go to war in defense of its flag, its 
honor, or its existence without first asking permission 
to do so of the great financial corporations of the 
country. If there was an invading force on our soil 


this hour, Congress could not with safety or show of 
success declare war to repel it without first supplica- 
ting cowardly and unpatriotic capital, engaged in bank- 
ing, not to contract the currency, withhold financial 
aid, and leave the country to starve. In fact, there 
is no measure of this Government, either in peace or 
in war, which is not wholly depending on the pleasure 
of the banks. 

"This Government is at the mercy of its own creat- 
ures. It has begotten and pampered a system which 
is now its master. The people have been betrayed 
into the clutches of a financial despotism which scorns 
responsibility and defies lawful restraint." 

At the present time the government is a submissive 
instrument in the hands of this money power. 

After a full discussion in the Senate, during which 
many amendments were added to the resolution, it was 
returned to the House. The House agreed to the 
amended bill with the exceptions of a few of the Sen- 
ate amendments, in which it refused to concur. 

The bill then went back to the Senate, which refused 
to recede from its amendments. 

Upon this disagreement, both Houses appointed 
Committees of Conference, who were to reconcile the 
differences existing between the two Houses with 
reference to the resolution as amended. 

After these committees had held several meetings an 
agreement was reached, the resolution was reported 
back to the Senate and House and the measure was 

This act was approved by the President on the 1 2th 
of July, 1882. 

Hence, this gigantic moneyed monopoly received a 
new lease of life for the period of twenty years longer. 

From this time on, it was the constant purpose of the 


national banks to build up a colossal system of bank 
credit that would make the entire business interests of 
the country tributary to its power. 

In the congressional election of 1882 the Republi- 
cans were overwhelmingly defeated, and the House 
became Democratic by a large majority. 

On February 12, 1884, Senator McPherson, of New 
Jersey, a millionaire and national banker, introduced 
a bill to permit national banks to increase their circu- 
lating notes up to the par value of the bonds deposited 
by them to secure their circulation. 

The Senate passed the bill, but it was defeated in the 

In this same month the sub-treasury at New York 
City, through the Assistant Treasurer, addressed an 
inquiry to the President of the New York Clearing 
House as to the effect of the government paying its 
balances in silver money. 

This action of the Sub-Treasurer was clearly for the 
purpose of renewing the agitation against silver, and 
it had the further intention of giving an excuse to the 
national bankers to precipitate a panic, and thus lay 
the foundation for a new demand for more legislation 
in favor of the banks. 

This cowardly act of the sub-treasurer was an implied 
admission that the Clearing House Association was 
more powerful than Congress, and that it was above 
all law. 

On February 18, 1884, a bill for the retirement and 
re-coinage of the trade dollar was taken up by the 

At this time the number of trade dollars afloat in 
the country approximated 36,000,000, and they had no 


legal tender debt-paying power whatever. They were 
mere bullion. 

On April i, 1884, the Committee on Banking and 
Currency, to whom the bill had been referred, reported 
it back to the House. 

This bill authorized the government to receive these 
trade dollars for all dues to the United States ; they 
were to be received in exchange for standard silver 
dollars coined under the Bland- Allison law ; after such 
exchange the trade dollars were to be coined into 
standard dollars. 

Section 4 of the act provided that the trade dollars 
so exchanged should be coined under the act of Feb- 
ruary 28, 1878. 

On motion of Mr. Bland, section 4 was stricken out, 
and the bill as thus amended, should it become a law, 
would add nearly forty million legal tender silver 
dollars to the volume of money. 

In its amended form it passed the House by a vote 
of 198 yeas to 45 nays, and it was transmitted to the 

In the meantime, after its passage by the House, 
the New York national banks had taken their cue 
from the letter addressed to them by the Sub- Treas- 
urer, and at once began a vigorous contraction of the 
currency by refusing to loan money to the West and 
South, and calling in outstanding loans. 

This action of the New York banks, with the tacit 
permission of the Treasury Department, brought on 
the great panic of 1884, in which year alone there were 
10,968 business failures, with liabilities aggregating 

At the same time money commanded three per cent. 


interest and commission per day on call. This was 
•usury at the annual rate of eleven hundred per centum ! 

It is asserted that while the banks refused to loan 
money, and were surrendering their circulating notes 
by depositing United States legal tenders with the 
Comptroller of the Currency, that the chief stock-hold- 
ers in these banks were using the deposits of these 
institutions in making loans at those exhorbitant rates 
of usury. 

It may be inquired by some, why did not the Comp- 
troller of the Currency exercise his lawful powers, and 
proceed against these banks for these notorious viola- 
tions of law? 

The facts were that every Comptroller of the Cur- 
rency, since the creation of that office, has been a will- 
ing instrument in the hands of the national banks, and 
the Comptrollers, time and again, authorized these 
banks to violate the national banking law whenever 
it was to the financial interests of these corporations. 

The open and notorious infractions of law practiced 
by these banks found ready apologists in Congress, 
who audaciously asserted that the banks were the best 
judges of the policy to be carried out by them, and 
that to enforce the law would close these institutions, 
and deprive the people of the benefits flowing from 
this beneficient system'. 

The history of the past thirty years exhibits this 
remarkable fact, that each and every Comptroller of 
the Currency, for his slavish subserviency to the 
national banks, has been rewarded by an election to 
the presidency of some one of these great financial 

Upon the appearance, in the Senate, of the House 


bill, providing for the recoinage of the trade dollars, 
it was referred to the Finance Committee, who 
reported a substitute of five sections. 

Section i authorized the exchange of trade dollars 
for standard dollars, the time of exchange to be lim- 
ited to July I, 1885. 

Section 2 provided that these trade dollars were to 
be coined as part of the bullion under the Bland- 
Allison law. 

Section 4 provided for a renewal of that farce, an 
International Monetar}^ Commission. 

Section 5 provided that if no treaties could be rati- 
fied with foreign nations for free coinage of silver 
before August i, 1886, then a suspension of the further 
coinage of silver dollars by the United States should 
take place by a repeal of the Bland- Allison law. 

No action was taken upon this bill by the Senate, 
and the efforts of the House to legitimize the trade 
dollar by making it legal tender, and to increase the 
volume of silver coin were again thwarted. 

In his annual message to Congress, in December, 
1884, President Arthur recommended the cessation of 
the coinage of the silver dollar, and gave as his 
reasons for such recommendation that nearly 185,000,- 
000 had been coined, of which only a little over 
40,000,000 were in circulation. 

We quote his language in full. He says : — 

* ' It appears that annually for the past six years there 
have been coined in compliance with the requirements 
of the act of February 28, 1878, more than §27,000,000. 
The number now outstanding is reported to be nearly 
$185,000,000, whereof but little more than §40,000,000, 
or less than twenty-two per cent., are in actual circula- 
tion. The mere existence of this fact seems to me to 


furnish of itself a cogent argument for the repeal of 
the statute which has made such a fact possible. ' ' 

President Arthur sought to convey the impression 
to Congress that only 40,000,000 silver dollars were in 

At the time he penned this message the records in 
the Treasury Department showed that 133,940,121 
silver dollars were in active circulation through their 
paper representative, the silver certificate, and that 
there were actually but 12,000,000 silver dollars lying 
idle in the Treasury. 

One striking fact which attracts attention is the fol- 
lowing: That the leading opponents to the coinage 
of silver dollars have never yet agreed upon the facts, 
and the arguments which they advance against the 
use of silver as money. 

In his message of December i, 1884, President 
Arthur urged as a weighty reason for the discontinu- 
ance of the coinage of silver dollars, that less than 
twenty-two per cent, of them were in actual circulation. 

In his report of 1880, in which he advised the cessa- 
tion of the coinage of the silver dollars, Secretary 
Sherman gave his reason why silver should not be 
coined, in which he says that it was not held, or 
hoarded, or exported, but it was pushed into active 

In this same message President Arthur made the 
following reference to the trade dollar: — 

"While the trade dollars have ceased, for the pres- 
ent at least, to be an element of active disturbance in 
our currency system, some provision should be made 
for their surrender to the Government. In view of 
the circumstances under which they were coined and 
of the fact that they never had a legal tender quality, 


there should be offered for them only a slight advance 
over their bullion value. ' ' 

This statement of the President with reference to 
the legal tender power of the trade dollar is evidence 
of those inaccuracies that occur many times in the 
state papers of high officials. The President averred 
that trade dollars were never legal tender, while the 
fact is that by the law of February 12, 1873, they 
were made legal tender for any one payment not 
exceeding five dollars. 

The law which conferred upon them this legal power 
continued in force until July 22, 1876, when the legal 
tender quality was taken away. 

A further inaccurate statement of the President 
appears, when he speaks of the amount of standard 
dollars in circulation, which he places at a little over 
40,000,000. While the actual facts were that the 
volume of silver dollars in circulation was 174,000,000. 

Secretary Sherman had urged as an insuperable 
objection against the further coinage of silver dollars 
that they were not held, or hoarded, but were kept in 
active circulation. President Arthur asked the suspen- 
sion of the Bland- Allison law of 1878 on the ground 
that they did not circulate actively enough. 

This is not the first time that these two distinguished 
gentlemen disagreed during their public careers, for 
while Sherman was Secretary of the Treasury, and 
President Arthur was collector of the Port of New 
York, they had a notable controversy, with which the 
public were doubtless familiar. 

While President Arthur was requesting Congress to 
suspend the coinage of the silver dollar, the banks of 
New York City combined to make a raid on the Treas- 


ury by presenting greenbacks for gold. That this 
was done with the connivance of Secretary of the 
Treasury, McCuUoch, is evident from the acts of that 
official. He had dispatched a telegram to the Sub- 
Treasurer, in New York City, stating that the country 
would be on a silver basis in thirty days. 

It was nothing less than a plot formed by the bank- 
ers and the Secretary to frighten Congress into repeal- 
ing the Bland-Allison law of 1878. 

In the meantime, the presidential campaign of 1884 
had resulted in the election of Grover Cleveland, of New 
York, over the Republican candidate, James G. Blaine. 

Prior to his election to the Presidency, Mr. Cleveland 
had held the office of Mayor of Buffalo, and was Gov- 
ernor of the State of New York, in which positions he 
had won much distinction as an honest and capable 

Some time previous to his inauguration, the report 
became current that the President-elect was opposed 
to the further coinage of silver. 

In order tg ascertain the views of Mr. Cleveland 
upon this phase of the financial issue, Congressman 
A. J. Warner and ninety-four members of the House, 
on the nth day of February, 1885, joined in a letter 
to the in-coming President, requesting that he outline 
his future policy on the silver question, then agitating 
the country. 

On February 24th, eight days before Mr. Cleveland 
was inaugurated, he gave out an open letter to the 
press in reply to that of Hon. A. J. Warner. 

In the course of that remarkable document occurs 
the following statement : — 

*'I hope that you concur with me, and with a great 


majority of our fellow-citizens, in deeming it most 
desirable at the present juncture to maintain and con- 
tinue in use the mass of our gold coin as well as the 
mass of silver already coined. This is possible by a 
present suspension of the purchase and coinage of 
silver. I am not aware that by any other method is it 
possible. It is of momentous importance to prevent 
the two metals from parting company ; to prevent the 
increasing displacement of gold by the increasing 
coinage of silver; to prevent the disuse of gold in the 
custom houses of the United States in the daily busi- 
ness of the people ; to prevent the ultimate expulsion 
of gold by silver. ' ' 

To state that the expectations of the Democratic 
party were rudely shattered by the position assumed 
by Mr. Cleveland, in his reply to the letter of Mr. 
Warner, would be putting it very mildly. 

The mass of the party expressed great astonishment, 
not to say indignation, at the bold stand taken by the 
President-elect, in which he aligned himself with the 
single gold standard. 

In his zeal for the suspension of the coinage of the 
silver dollar, Mr. Cleveland was led into erroneous 
statements of facts as to the alleged disuse of gold in 
the custom houses and in the business of the people. 

It is a matter of public record that, in 1880, the 
imports of gold exceeded the exports thereof by $77,- 
119,371; in 1 88 1, the excess of imports of gold over 
exports were $1,789,174; in 1883, $6,133,261; in 1884 
the exports of gold over imports were $18,250,640, 
leaving a great balance of imported gold over exports 
during those five years of more than $150,000,000. 

This great gain of gold took place during the time 
the Bland-Allison law was in operation. 

Upon the appearance of this reply of Mr. Cleveland 


to the communication of Hon. A. J. Warner and 
others, the Wall street clique and their allies seized 
their opportunity. 

They swooped down on Congress and endeavored to 
force a repeal of the silver law. 

The members of the House were besieged by these 
hordes of coin venders and bullion brokers; the 
national banking money power threatened to visit 
another panic upon the people, and predictions were 
freely made that gold would go to a premium if the 
silver law was not repealed. 

The Democratic members of Congress were informed 
by the thousand per cent, men of New York City that 
it was the wish of President-elect Cleveland that the 
law authorizing the coinage of silver dollars be 

The New York Herald, one of the greatest journals 
of the East, constantly kept in a prominent place in its 
columns, the legend, "We are still coining the 70 and 
75 per cent, dollars." 

Every means and all possible influences were 
brought to bear upon Congress to force it to repeal 
the Bland-Allison law, but without avail. 

A single attempt was made to carry into effect the 
wish of the President-elect, but it failed so ignomin- 
iously by such a decisive vote that no further effort 
was made in that Congress. It was as follows : On 
February 26, 1885, House bill 8256, being the sundry 
civil appropriation bill, was pending before the House. 
A clause was tacked to this bill, providing for the 
suspension of the operations of the law of February 
28, 1878, — the Bland- Allison law. 

Mr. Randall, an Eastern Democratic member of the 


House, moved to suspend the rules and consider said 

This motion was disagreed to by a vote of 1 1 8 yeas 
to 152 nays, and this clause was abandoned and stricken 
from the bill. 

The letter of Mr. Cleveland was regarded by the 
House as an open and manifest attempt to influence 
Congress against the continued coinage of silver, and,., 
if such was the intention of the President-elect, he 
promptly received a well-deserved rebuke for his 
attempted interference with the legislation of Con- 

One feature of the conduct of Mr. Randall, in his 
effort to engraft upon an appropriation bill a clause to 
repeal the Bland-Allison law, exhibits the avidity of 
the money power to seize every opportunity, however 
slight, to gain its ends by legislative sanction, and 
that is — immediately upon the appearance of the 
Warner letter, it presumed that the mere ipse dixit of 
Grover Cleveland would coerce Congress into submis- 
sion to his views. 

The infamous nature of the financial legislation from 
1862 to 1875, i^ so enormously enhancing the value of 
the public debt, and in enriching the bond-holders at 
the expense of the productive energy of the country, 
will be shown by the following figures, taken from a 
work entitled, "The Philosophy of Price," quoted in 
the Daily News Almanac and Political Register for 

The time covered by "Philosophy of Price" is from 
July I, 1866, up to and including 1885. "Philosophy 
of Price" says: — 

"Here is a table showing the debt of the United 


States on the ist of July, 1866 and 1885, including 
non-interest bearing greenlDacks, expressed in dollars, 
and also in the things working folks have to produce 
in order to get the dollars with which to pay debts and 
interest : — 

National Debt 1866. National Debt 1885. 

Debt in dollars $2,773,000,000 $800,000,000 

Beef, barrels 129,000,000 135,000,000 

Corn, bushels 2,000,000,000 3,000,000,000 

Wheat, bushels 800,000,000 1,740,000,000 

Oats, bushels 3,262,000,000 4,357,000,000 

Pork, barrels 82,000,000 96,000,000 

Coal, tons 213,000,000 400,000,000 

Cotton, bales 12,000,000 34,000,000 

Bar iron, tons 24,000,000 40,000,000 

"Almost every product of labor show^s the same result. 
We paid from 1866 to 1884 on the public debt: Inter- 
est, $1,870,000,000, and principal about $1,200,000,000; 
yet we find that what there is left of it when measured 
by labor, or the product of labor, is fifty per cent, 
greater than the original debt. ' ' ^ 

This colossal robbery of the nation, and consequently 
of the people, was planned and matured by the na- 
tional banking money power. It is true that the idea 
of this system of banking had its origin in England, 
and it is also a fact that the scheme of legislating 
increased value into the bonded debt was suggested 
by the influential bankers of London. 

Each one of the series of enactments which legally 
confiscated billions of property of the tax-payers, and 
which handed it over to a few individuals, was placed 
upon the sta^te-books under the false and misleading 
plea of mainlining the "Credit of the nation untar- 

, That distinguished historian, Prof. J. C. Ridpath, 
eloquently described the legislative process by which 


the value of the public debt was vastly increased. He 
said : — 

**It is the hardship of war that brings debt upon the 
country which engages in it. In our own case we 
piled up a debt mountainwise. The prodigious pile 
reached the clouds. In any old nation there would 
have remained no hope at all of paying it. It would 
simply have been laid upon posterity as an everlasting 
tax. The principal question, however, with Congress 
and with the people of the United States, was how 
they should measure and manage this debt. Gold and 
silver had disappeared. Paper money prevailed and 
abounded. The premium on coin arose to almost two 
hundred per cent. The dollar of the law and the 
contract became a paper dollar, which, as measured 
by the standard of gold, was, for a considerable period, 
worth less than fifty cents. 

"But what was the equity of this situation? One 
class of statesmen, backed up and instigated by the 
creditor classes, held that the dollar was always the 
gold and silver dollar. Practically this was not so. 
Theoretically and even constitutionally it was probably 
so. For many years together the dollar of the law and 
the contract was, to all intents and purposes, a dollar 
of paper. During the same period the modicum of 
gold and silver remaining in the countr^^ — though it 
was stamped and branded with the names of coins — 
was really merchandise. At length the bottom was 
reached — or the top, as the case may be — and the 
readjustment became necessary. 

"Then came on the warfare between the advocates of 
the so-called 'honest dollar' and the paper dollar with 
which, and on the basis of which, the business of the 
country had been so long transacted. The advocates 
of high payment took the 'honest dol"Rir' as their 
catch-word, and, to make a long narrative brief, they 
won with it, and by a series of legislative enactments, 
entailing the greatest hardships on the producing 
interests of the country, succeeded in twisting up. 


turn by turn, the standard unit in the financial mill, 
until the so-called resumption of specie payment was 
finally, after fourteen years from Appomattox, 

*'Thus the value of the national debt was aug^mented 
from year to year as rapidly as it was paid away. As 
fast as payment was made the value of the dollar in 
which it was expressed was increased. To the debtor 
class all this was the labor of Sysiphus. The toiler 
laboriously rolled the stone to the top of the hill ; but 
ever, when near the crest, it got away with him and 
returned with thundering and the roar of bankruptcy 
to the bottom. To the present day the process has 
been kept up, and, notwithstanding the multiplied 
billions upon billions which the American people have 
paid in principal and interest upon that patriotic war 
debt, which expressed their devotion and sacrifice, it 
is the truth of history, that the debt itself, is at the 
present time, worth virtually as much to the holders 
as it was when it reached its nominal maximum — in 
August, 1865." 

In his effort to convey an adequate idea of the nature 
of that legislation, which had plundered the American 
people of billions of dollars, this renowned scholar 
and writer had recourse to the sublime imagery of 

Prof. Ridpath demonstrates that the public debt was 
not decreased at all, although billions had been applied 
to its payment. 

Not only is this true of the public debt, but the same 
process of depreciating the value of property has 
likewise enhanced the value of private debts. 

The amount of property that has been transferred 
from debtors to creditors, as a necessary result of the 
enormous appreciation of money brought about by 
contraction of its volume, is beyond computation. 


In a great speech, Wendell Phillips, illustrates the 
means by which the money power absorbed the wealth 
of the country, by juggling with the currency. He 
said : — 

''In other words, it was the currency, which, rightly 
arranged, opened a nation's well springs, found work 
for willing hands to do, and filled them with a just 
return, while honest capital, daily larger and more 
secure, ministered to a glad prosperity. Or it was 
currency, wickedly and selfishly juggled, that made 
merchants bankrupt and starved labor into discontent 
and slaver}^ while capital added house to house and 
field to field, and gathered into its miserly hands all 
the wealth left in a ruined land. 

"The first question, therefore, in an industrial 
nation is, Where ought control of the currency to rest? 
In whose hands can this almost omnipotent power be 
trusted? Every writer of political economy, from 
Aristotle to Adam Smith, allows that a change in the 
currency alters the price of every ounce and yard of 
merchandise and every foot of land. Whom can we 
trust with this despotism? At present the banks and 
the money kings wield this power. They own the 
yard-stick, and can make it longer or shorter, as they 
please. They own every pound weight, and can make 
it heavier or lighter as they choose. This explains the 
riddle, so mysterious to common people, that those 
who trade in money always grow rich, even while 
those who trade in other things go into bankruptcy." 

On the 3d of February, 1886, Hon. R. Q. Mills, of 
Texas, in the heat of righteous indignation eloquently 
arraigned that unlimited avarice that was continually 
besieging Congress to enhance the value of bonds and 
securities at the expense of the producers. He said : — 

"But in all the wild, reckless, and remorseless brutal- 
ities that have marked the footprints of resistless 
power there is some extenuating circumstance that 


mitigates the severity of the punishment due the 
crime. Some have been the product of the fierce 
passions of war, some have come from the antipathy 
that separate alien races, some from the superstitions 
of opposing religions. 

"But the crime that is now sought to be perpetrated 
on more than fifty millions of people comes neither 
from the camp of a conqueror, the hand of a foreigner, 
nor the altar of an idolator. But it comes from those 
in whose veins runs the blood of the common ancestry, 
who were bom under the same skies, speak the same 
language, reared in the same institutions, and nurtured 
in the principles of the same religious faith. It comes 
from the cold, phlegmatic, marble heart of avarice, — 
avarice that seeks to paralyze labor, increase the bur- 
den of debt, and fill the land with destitution and 
suffering to gratify the lust for gold, — avarice sur- 
rounded by every comfort that wealth can command, 
and rich enough to satisfy every want save that which 
refuses to be satisfied without the suffocation and 
strangulation of all the labor of the land. With a 
forehead that refuses to be ashamed, it demands of 
Congress an act that will paralyze all the forces of 
production, shut out labor from all employment, 
increase the burden of debts and taxation, and send 
desolation and suffering to all the homes of the poor." 

In his first annual message to Congress, December 
8, 1885, the President took a decided stand against the 
continued coinage of silver. In this document he 
says : — 

"The necessity of an addition of the silver currency 
of the nation as is compelled by the silver coinage act 
is negatived by the fact that up to the present time 
only about fifty millions of the silver dollars so coined 
have found their way into circulation, leaving more 
than one hundred and sixty-five millions in the posses- 
sion of the Government, the custody of which has 
entailed considerable expense for the construction of 


new vaults for its deposits. Against this latter amount 
there are outstanding silver certificates amounting to 
about ninety-three millions of dollars." 

Further on in this same message he said : — 
"At times during the past six months fifty-eight per 
cent, of the receipts for duties have been in silver or 
silver certificates, while the average within that period 
has been twenty per cent." 

A comparison of the statements in his message with 
the predictions ventured in the Warner letter will be 
instructive. In the latter he desired "To prevent the 
disuse of gold in the custom houses of the United 
States;" in his message of December 8, 1885, he 
shows that instead of silver displacing gold in the pay- 
ment of duties, only about twenty per cent, of the 
latter were paid in silver or silver certificates. 

Just why the payment of twenty per cent, of the 
duties in silver should arouse the apprehensions of the 
President is not very apparent. 

Furthermore, the very purpose of coining these 
silver dollars was to enable people to transact business, 
to pay their debts to each other, and to the Govern- 

Mr. Cleveland further says : — 

"The condition in which our Treasury may be 
placed by a persistence in our present course, is a 
matter of concern to every patriotic citizen who does 
not desire his Government to pay in silver such of its 
obligations as should be paid in gold. ' ' 

Again he says: — 

"We have now on hand all the silver dollars neces- 
sary to supply the present needs of the people and to 
satisfy those who from sentiment wish to see them in 
circulation, and if their coinage is suspended, they can 
readily be obtained by all who desire them. If the 


need of more is at any time apparent their coinage can 
be renewed. ' ' 

The President then recommends the suspension of 
the coinage of silver dollars coined under the law of 

According to the President's theory and reasoning, 
the most effective means of supplying the volume of 
money needed by the people would be a suspension of 
its coinage. 

In this message President Cleveland came out 
squarely in favor of perpetuating the national bank- 
ing system. In this course he allied himself with the 
money power, and earned the unenviable distinction 
of being the first Democratic President that advocated 
the policy of delegating the power of issuing money to 
private corporations. 

In this course he was sustained by a few Eastern 
Democratic members of Congress, but he could not 
lead the great body of the Western and Southern 
Democracy to accept that Tory-Republican system of 
finance that had been imported from London in 1863. 

During the following year, the use of silver and silver 
certificates increased from $143,000,000 to $167,000,000, 
which indicated the great popularity of this form of 
money with the people. 

Notwithstanding these facts, the President in his 
next annual message, December 6, 1886, said: — 

"I see no reason to change the views expressed in 
my last annual message on the subject of compulsory 
coinage. ' ' 

On December 17, 1886, Senate bill No. 199, provid- 
ing for the redemption of the trade dollars for standard 
silver dollars, the trade dollars so redeemed to be sent 


to the mints for coinage as part of the bullion to be 
purchased under the Bland-Allison law of February 
28, 1878, passed the Senate. 

On February 12, 1887, Senate bill 199 was pending 
before the House, and it was amended to authorize 
the receipt of trade dollars for government dues, and 
in exchange for standard dollars, and for coining the 
said trade dollars into standard dollars, not as part of 
the bullion and coinage under the Bland-Allison law. 

The bill, as amended, passed by a vote of 174 yeas 
to 36 nays ; both Houses appointed a Committee of 
Conference, which reported a substitute that fixed the 
period of six months from date of the act for the 
exchange of trade dollars for standard dollars, or for 
fractional silver coin. The trade dollars so exchanged 
were to be recoined and not counted as part of the 
silver to be purchased under the Bland- Allison law of 

This act became a law without the approval of the 

Be it said to the eternal honor of the House of Repre- 
sentatives, which was Democratic, the advice and recom- 
mendations of the President fell on deaf ears, and 
this co-ordinate branch of the Government would not 
be coerced into repealing the Bland-Allison silver law. 

In spite of the fears of President Cleveland that gold 
would be displaced by the increased coinage of silver, 
the net gain of gold during his administration was 
increased many millions. 

In the meanwhile the monetary stringency of 1884 
continued in all its severity, and even the banks of 
New York City felt the effects of the panic, which was 
the direct result of their concerted action. 


These great financial institutions of New York City 
called upon the Government for assistance ; whereupon 
Secretary of the Treasury Manning, a national banker, 
came to their relief by depositing with these banks 
government money to the amount of $63,000,000 with- 
out interest for the use of that enormous sum, which 
had been wrung from the people by a burdensome 
system of taxation. 

Had the farmers of Kansas, or Nebraska, requested 
the Federal Government to loan them the public funds 
to assist them in agricultural pursuits, the millionaire 
beggars and paupers of Wall street would have 
emitted a loud and prolonged howl that would have 
been heard to the nethermost parts of the earth. 

The people of Kansas and Nebraska would have 
been assailed by every epithet that could have been 
coined from the English language. 

The national bank monopoly, the gold gamblers, 
stock speculators, railroad wreckers, the Shylocks, 
who gladly exacted a thousand per cent, usury, with 
the subsidized press and its satellites, would have 
denounced the hard working farmer of Kansas or 
Nebraska as a "long whiskered hay-seed," a "social- 
ist," a "dangerous anarchist," or a "crank." 

The Nasts and the Gillams, famed in caricature, 
would have expended all their genius in holding him 
up to ridicule. 

While it would be dangerous socialism for the Gov- 
ernment to assist the farmer during his calamities, it 
was the highest essence of patriotism to save the 
panic-breeders of New York City from the conse- 
quences of their own traitorous conduct by donating 
them the use of $63,000,000 in government funds. 


In the meantime, notwithstanding the aid received 
from the Federal Government, the banks of New York 
City organized a clique with the intention of making 
a raid upon the gold in the Treasury. 

The base ingratitude of the New York banks aroused 
the ire of Secretary Manning, and he called upon those 
banks who had organized a corner against the Treasury 
gold, and informed them of what would follow if they 
persevered in that course. He said : — 

"You may precipitate a panic. The Government is 
strong; the Government can stand a panic, but you 
will have the panic if you continue to embarrass the 
Government as you have done. ' ' 

He continued : — 

"Here are twenty million dollars in round silver 
dollars, not certificates. Give me your gold for it and 
stop this raid upon the Treasury, or else you shall 
have the panic." 

The heroic treatment of Secretary Manning was a 
warning to these scoundrels, who would willingly sink 
the Government if money could be made by the oper- 

The stern threats of the Secretary frustrated this 
attempt to loot the Treasury of its gold, and to coerce 
Congress into repealing the Bland- Allison silver law. 

In his annual message of December, 1887, President 
Cleveland relegated the financial question to the rear, 
and pushed the tariff issue to the front. 

This document is justly regarded as one of the 
strongest state papers that ever eminated from the 
pen of the President. 

In this message the President urged the necessity of a 
complete reformation of the then existing tariff, and he 
took strong grounds in favor of suppressing the trusts. 


Upon the appearance of this message, the leaders of 
the Republican party charged the President with hav- 
ing committed the Democracy to the policy of British 
free trade. 

Mr. Blaine, who was in Paris at the time when the 
contents of the message were made public, availed 
himself of the opportunity to answer the President by 
a counter blast, in the form of an extended interview 
held with a representative of the New York Tribune. 

Meanwhile, since 1883, the national banks steadily 
continued their policy of contracting the currency, by 
substituting government legal tender notes for the 
United States bonds deposited with the Comptroller 
of the Currency to secure their circulating notes. 

This policy, to a large extent, neutralized the bene- 
fits derived from the increased use of silver. 

The object of the banks, in thus withdrawing their 
bonds deposited to secure their circulating notes, was 
for the avowed purpose of obtaining the great premium 
which they brought in the market — a premium which 
ranged as high as twenty-nine per cent, on the dollar. 

Beside the contraction brought about by the process 
of depositing legal tender notes to redeem the circula- 
ting notes of national banks, the latter form of currency 
was surrendered by the banks, and the bonds depos- 
ited to secure these bank notes were taken up by the 
depositors and sold for the premium. This worked a 
double contraction of the currency. 

During this time the Government was redeeming its 
bonds, and this process of redemption was carried on 
by the payment of a large premium to the bond-hold- 
ers and national bankers. 

In his report for the year 1892, the Comptroller of 


the Currency showed the extent to which this system 
of contraction was carried on from 1883 to 1888 by 
these fiscal agencies of the Government. 

From October 31, 1883, to October 31, 1884, the 
national banks surrendered their circulating notes to 
the amount of $24,170,676; from October 31, 1884, to 
October 31, 1885, the banks surrendered $15,545,461; 
from October 31, 1885, to October 31, 1886, national 
bank notes were contracted $56,590,533; from October 
31, 1886, to October 31, 1887, the banks surrendered 
up their notes to the amount of $50,495,589; from 
October 31, 1887, to October 31, 1888, a further 
decrease was made by cancelling national bank notes 
to the amount of $16,848,739. 

It will be ascertained that the total voluntary con- 
traction of national bank currency, from 1883 to 1888, 
reached the great sum of $163,000,000. 

Although the Bland- Allison law was in operation, 
and the Government was throwing vast sums of money 
into circulation by the redemption of bonds, yet the 
volume of money in circulation was not increased. 

For nearly every dollar emitted by the Treasury 
Department for the redemption of bonds, the national 
banks surrendered up almost an equal amount of their 
circulating notes. 

On February 29, 1888, House bill No. 5034 was 
pending in the House of Representatives. 

This measure authorized the Secretary of the Treas- 
ury to apply the surplus in the Treasury to the pur- 
chase or redemption of United States bonds. The 
bill passed. 

The object of this measure aimed at relieving the 
money market of its stringency by the purchase of 


bonds, and the consequent increase of the volume of 

On March 26, 1888, House bill 5034 came up in the 
Senate, and Senator Spooner offered a substitute, 
declaring section 2 of the sundry civil appropriation 
law of June 30, 1882, a permanent provision. The 
substitute was agreed to by the Senate. 

Senator Beck offered an amendment, directing the 
Secretary of the Treasury, on the retirement of 
national bank circulation, and on failure of other 
banks to take out an equal amount, then to purchase 
an equivalent amount of silver bullion in excess of the 
minimum, required under the law of February 28, 
1878, to be coined and used as provided in said act. 

The amendment was agreed to by a vote of 32 yeas 
to 13 nays. 

During the debate on the amendment offered by 
Senator Beck, Senator Plumb made the following 
remarks : — 

" It is estimated that there are in circulation, includ- 
ing that which is locked up in the Treasury and held 
in the banks as a reserve fund, about $1,600,000,000, 
of all kinds of currency of the United States, gold and 
silver, the overplus of gold and silver certificates, 
greenback notes and national bank notes, all told, and 
there are more than $60,000,000,000 of property which 
must finally be measured by this volume of currency. 
It has been contracted during the last year more than 
five per cent, in addition to all that has occurred by 
reason of abrasion and loss. No man can tell the 
volume of greenbacks outstanding. Nominally it is 
$346,000,000 and a fraction, but that volume has been 
subject to all the accidents which have occurred dur- 
ing the past twenty-five years, whereby money has 
been consumed, worn out, lost, and it is doubtful if 
the amount is really over $300,000,000 to-day. 


"But say nothing about that, the retirement of the 
national banking circulation during the past twelve 
months has been five per cent, of the total amount of 
the currency outstanding. There has been during 
that period a phenomenal depreciation of the prices 
of property. There has been the greatest deprecia- 
tion of the price of agricultural products the country 
has ever known. ' ' 

In speaking of the effects of contraction of the cur- 
rency in depreciating the value of property, he said : — 

'*The contraction of the currency by five per cent, of 
its volume means the depreciation of the property of 
the country $3,000,000,000. Debts have not only 
increased, but the means to pay them have diminished 
in proportion as the currency has been contracted. 
Events based upon nonlegislation have proved of 
advantage to lenders, but disastrous to borrowers." 

The bill then went to the House, but as it was near 
the close of the session, it did not receive any consid- 

Meanwhile the panic of 1884, as it was called — but 
which really began in 1882 — raged throughout the 
entire administration of President Cleveland. 

The aggregate number of failures for the years 1885, 
1886, 1887 and 1888 were 51,748, and the liabilities 
were $756,597,883. 

It was during this period of business failures and 
general depression everywhere, with the consequent 
sacrifice of property at ruinous prices, that the holders 
of United States bonds were obtaining a premium for 
their bonds ranging as high as twenty-seven per cent. 

In his annual message of December, 1888, President 
Cleveland again urged the repeal of the Bland- Allison 
law. He said: — 

"The Secretary recommends the suspension of the 


further coinage of silver, and in such recommendation 
I earnestly concur. ' ' 

Up to November 30, 1888, 312,570,990 silver dollars 
had been coined, of which 60,970,990 were in active 
use, not including silver certificates to the amount of 
$237,418,346 — making a total of $298,389,336 in silver 
dollars and certificates that were in active circula- 

It will be observed that the many predictions of 
President Cleveland, as to the capacity of the country 
to use silver as money, were utterly discredited by 
these facts. 

The determined opposition of the President to the 
coinage of silver was one of the strange features of an 
otherwise highly successful administration. 

With the exception of his hostile attitude to silver 
as money, and his advocacy of the perpetuation of the 
national banking system, Mr. Cleveland gave the 
people an administration of public affairs that shed 
honor upon himself, and its efficiency was not sur- 
passed by any in the annals of American history. 

During the four years that he directed the public 
affairs of the nation, the public debt was reduced in 
the magnificent sum of $341,448,449. 

It is true that this vast decrease of the public debt in 
the short period of four years resulted in an immense 
profit to the bond-holders and national bankers who 
surrendered their bonds for payment. 

The amount of premium on the bonds so surrendered 
was $59,000,000, and this measured the profit obtained 
by the banks and bond-holders in the process of re- 
deeming the debt. 

In addition to this vast decrease of the public debt, 


a surplus of $83,269,220 was accumulated in the Treas- 
ury over and above the gold reserve of $100,000,000. 

In addition to this vast sum of money, the result of 
a frugal and honest administration, a bank security 
fund of $82,597,250 in legal tenders was accumulated 
as a trust fund for the redemption of national bank 

The total amount of cash in the Treasury on the 4th 
of March, 1889, when his successor was inaugurated, 
was $265,846,441. 

His administration of other departments of the 
Government was notably successful. 

Tens of millions of acres of the public lands, fenced 
in by great corporations, were restored to the public 
domain, and the usurpers driven off by the vigorous 
policy of the President. 

Land grants embracing many millions of acres were 
forfeited and throw open for settlement. 

For the first time since 1861, the Indian Department 
was honestly managed, and the red man received just 
and humane treatment at the hands of the United 

Nevertheless the ultimate baleful results of his influ- 
ence in favor of the national banks, and a single stand- 
ard of gold, eventually more than counteracted an 
honest, economical management of the public affairs 
of the country. 



"Resolved, That Congress has no power to charter a 
United States bank ; that we believe such an institu- 
tion to be one of deadly hostility to the best interests 
of the Government, dangerous to our republican insti- 
tutions and the liberties of the people, and calculated 
to place the business of the country within the control 
of a concentrated money power and above the laws 
and the will of the people." — Democratic Plat- 
form, 1840. 

"The right of issuing paper money as currency, like 
that of issuing gold and silver coins, belongs exclu- 
sively to the nation, and cannot be claimed by any 
individuals. ' ' — Albert Gallatin. 

In the presidential campaign of 1888, General Ben- 
jamin Harrison was the successful candidate for the 

The national Republican platform, on which Mr. 
Harrison stood, vigorously charged the administration 
of President Cleveland with having attempted to de- 
monetize silver. 

The active opposition of President Cleveland to the 
use of silver as money gave some color to this charge. 
On the 4th of March, 1889, General Harrison was duly 

For Secretary of the Treasury he selected the Hon. 
William Windom, of Minnesota. 

In addition to having the Presidency, the Republi- 
cans had control of both branches of Congress. 

John Sherman occupied his old position of Chairman 
of the Finance Committee of the Senate. 

2?0 , 


In his first annual message to Congress, December 
3, 1889, President Harrison paid special attention to 
the coinage of silver under the Bland-Allison law of 
1878. He said: — 

"The total coinage of silver dollars was, on 
November i, 1889, $343,638,001, of which $283,539,521 
were in the Treasury vaults and $60,098,480 were 
in circulation. Of the amount in the vaults $277,319,- 
944 were represented by outstanding certificates, leav- 
ing $6,219,577 not in circulation and not represented 
by certificates. ' ' 

In this message. President Harrison gave Congress 
and the people the clearest and fairest statement with 
reference to the number and circulation of silver dol- 
lars that was yet presented by any President up to his 

Every one who would avail himself of the facts 
stated in this document knew, that, of the silver dol- 
lars coined under the Bland- Allison law of 1878, all 
were in active use and circulation except the small 
sum of $6,219,577. 

The facts stated by President Harrison amply proved 
that the predictions and apprehensions of President 
Cleveland and others, with reference to the continued 
coinage of standard silver dollars, were absolutely 

This remarkable absorption of silver in the channels 
of trade and commerce, evinced the great popularity 
of this money with the people. 

The President further says : — 

"The evil anticipations which have accompanied the 
coinage and use of the silver dollar have not been 
realized. As a coin it has not had general use, and 
the public Treasury has been compelled to store it. 


But this is manifestly owing to the fact that its paper 
representative is more convenient. The general ac- 
ceptance and use of the silver certificate shows that 
silver has not been otherwise discredited." 

It seems from the opinion of President Harrison, as 
expressed in this message, that the use of the silver 
certificate in lieu of the coin it represents, was the only 
evidence by which it was shown that silver was 

If the issuance of silver certificates operates to dis- 
credit the silver dollar, then, by a parity of reasoning, 
the use of gold certificates as a substitute for gold coin 
discredits gold. 

At the time the President stated that silver was dis- 
credited by the use of certificates, there were outstand- 
ing gold certificates aggregating $165,000,000. 

If the holder of silver dollars deposits that coin in 
the Federal Treasury, and receives therefor silver 
certificates, and thus discredits the silver dollar, then 
the owner or holder of gold coin, or bullion, who 
deposits his coin or bullion in the Treasury, and ac- 
cepts gold certificates, also discredits gold. 

The partial eulogy bestowed by President Harrison 
upon silver was intended as a reflection upon those 
public utterances of Mr. Cleveland, in which the 
latter opposed the use of silver as money. 

Further on in the same message the President 
said : — 

"I think it is clear that if we should make the coin- 
age of silver at its present ratio free, we must expect 
that the difference in the bullion values of gold and 
silver dollars will be taken into account in commercial 
transactions, and I fear the same result would follow 
any considerable increase of the present rate of coin- 


President Harrison was an able lawyer, and was 
trained '*To make the worse appear the better reason." 

From the tenor of the language of President Har- 
rison first quoted, he delicately ridicules the severe 
strictures of President Cleveland upon silver as money, 
and he seeks to cast reproach upon the late administra- 

In the language last quoted, the President, with the 
ability of a skilled special pleader, uses innuendo 
against free coinage, and he speaks of the difference 
in the bullion value respectively of gold and silver coin, 
as a great obstacle in the way of free coinage of the 
latter metal. 

Having thus cunningly stated his objections to the 
free coinage of silver, he carried his fears from that 
subject into the system of government purchase of 
bullion, and its coinage into dollars under the Bland- 
Allison law, and he suggested that there is peril in the 
further continuation of the coinage of silver dollars. 

At this time, Secretary Windom recommended his 
plan to Congress, which provided that any owner 
of silver bullion could deposit it in the Treasury, and 
receive therefor silver certificates upon the bullion 
value of the silver so deposited. 

When Mr. Windom recommended this plan, the bul- 
lion value of the silver dollar was only seventy per 
cent, of the bullion value of the gold dollar, and the 
adoption of his plan by Congress would have created 
two classes of silver money and silver certificates. 

The silver certificate issued under the Bland- Allison 
law would have represented far less bullion value than 
the certificate issued under his plan. It can be seen 
that the object of the Windom plan was to disparage 



the silver dollars and their paper representatives issued 
tinder the Bland- Allison law, and to supply the national 
banking money power with an opportunity to de- 
nounce the standard silver dollar as a "cheap dollar," 
a "dishonest dollar," a "70-cent dollar." 

Then demands would be made upon the Government 
to protect its credit by redeeming the standard silver 
dollars in gold. 

This would compel the issue of nearly $400,000,000 
in interest-bearing bonds to secure gold for redemption 
purposes ; and would have resulted in a contraction of 
the currency equal to the amount of standard silver 
dollars coined since February 28, 1878. 

The Windom plan was transmitted to Congress, 
where it was introduced as House bill 5381. 

On June 5, 1890, House bill 5381, known as the 
Windom Silver Bullion Purchase Bill, was pending in 
the House. Mr. Bland moved to recommit, with in- 
structions to the committee to report back a bill for the 
free coinage of silver. 

The motion was defeated by a vote of 116 yeas to 
140 nays. 

A substitute offered by Mr. Conger was then passed, 
and was known as House bill 5381. 

On June 17th, House bill 5381 was reported by the 
Finance Committee of the Senate with sundry amend- 
ments ; while it was pending, Mr. Plumb, of Kansas, 
offered an amendment for free and unlimited coinage 
of silver; which was agreed to by a vote of 43 yeas to 
24 nays. The bill as amended into a free coinage 
measure was then passed by the Senate. 

On June 25th, the Senate bill came up in the House, 
and, after long wrangling, the Senate free coinage 
amendment was defeated. 


Both Houses appointed a Conference Committee 
which, after long deliberation, brought in a conference 

In a speech on this conference report, Hon. R. P. 
Bland exposed the trickery of the Republican mem- 
bers of that committee in holding secret meetings to 
prevent the free coinage members from participating 
in its deliberations. He said : — 

*'Now, Mr. Speaker, the gentleman from Iowa 
[Mr. Conger] says this bill is the result of a free 
and fair conference. I deny it. We had but one meet- 
ing in which all the conferees were represented. That 
was the meeting appointed for last Thursday. We 
were to have another meeting of the conferees, but 
before the date of the meeting arrived, I was notified 
that my presence was no longer needed and that when 
my services were required, I would be notified. In the 
meantime, secret meetings or caucuses were held by 
the RepulDlican members of that conference and this 
bill was concocted and prepared by them ; and I never 
received a notice to attend another meeting of this 
conference until this bill was agreed to and the report 
was ready to be signed; and I was simply asked 
whether I agreed to it or not. ' ' 

In the Senate debate on the bill reported by the 
Conference Committee, Senator Cockrell, of Missouri, 
pointed out that this measure was designed for the 
degradation of silver as a money metal, and that the 
Secretary of the Treasury was invested with such great 
powers that he could practically demonetize silver by 
refusing to pay it out for the redemption of the Treas- 
ury notes, which, under this act, would be issued to 
buy the silver bullion out of which silver dollars were 
to be coined. 

In reply to these remarks of Senator Cockrell, Sen- 


ator Sherman stated, that, if the Secretary should thus 
discriminate against the use of silver, he ought to be 

On July loth, the report was agreed to in the Senate 
by a vote of 39 yeas, all Republicans, and 26 nays, all 

On July 12th, the House concurred in the conference 
report by a vote of 122 yeas, all Republicans, except 
one independent, and 90 nays, all Democrats. 

Thus the so-called Sherman Silver Purchasing Law 
of July 14, 1890, found its way upon the statute-books. 

It will be noticed that in the vote of both Houses 
upon this bill, not a single Democratic member favored 
its passage. 

They knew that in the hands of a Secretary of the 
Treasury hostile to the use of silver, this law would 
become the most formidable weapon of the national 
banking money power to strike a deadly blow against 
the continued coinage of that metal into money. 

The full text of this act is as follows : — 

"An act directing the purchase of silver bullion and 
the issue of Treasury notes thereon, and for other 
purposes. ' ' 

*'Be it enacted. That the Secretary of the Treasury 
is hereby directed to purchase, from time to time, sil- 
ver bullion to the aggregate amount of 4,500,000 
ounces, or so much thereof as may be offered in each 
month, at the market price thereof, not exceeding $1 
for 371.25 grains of pure silver, and to issue in pay- 
ment for such purchases of silver bullion Treasury 
notes of the United States to be prepared by the Sec- 
retary of the Treasury, in such form and of such de- 
nominations, not less than $1 nor more than $1,000, as 
he may prescribe, and a sum sufficient to carry into 
effect the provisions of this act is hereby appropriated 


out of any money in the Treasury not otherwise appro- 

' * Section 2. That the Treasury notes issued in accord- 
ance with the provisions of this act shall be redeem- 
able on demand, in coin, at the Treasury of the United 
States, or at the office of any assistant treasurer of 
the United States, and when so redeemed may be re- 
issued ; but no greater or less amount of such notes 
shall be outstanding at any time than the cost of the 
silver bullion and the standard silver dollars coined 
therefrom, then held in the Treasury, purchased by 
such notes ; and such Treasury notes shall be a legal 
tender in payment of all debts, public and private, 
except where otherwise expressly stipulated in the con- 
tract, and shall be receivable for customs, taxes, and 
all public dues, and when so received may be reissued ; 
and such notes, when held by any National Banking 
Association, may be counted as a part of its lawful 
reserve. That upon demand of the holder of any of 
the Treasury notes herein provided for, the Secretary 
of the Treasury shall, under such regulations as he 
may prescribe, redeem such notes in gold or silver 
coin, at his discretion, it being the established policy 
of the United States to maintain the two metals on a 
parity with each other upon the present legal ratio, or 
such ratio as may be provided by law. 

*' Section 3. That the Secretary of the Treasury shall 
each month coin 2,000,000 ounces of the silver bullion 
purchased under the provisions of this act into stand- 
ard silver dollars until the i st day of July, 1 89 1 , and after 
that time he shall coin of the silver bullion purchased 
under the provisions of this act as much as may be 
necessary to provide for the redemption of the Treas- 
ury notes herein provided for, and any gain or seign- 
iorage arising from such coinage shall be accounted for 
and paid into the Treasury. 

"Section 4. That the silver bullion, purchased under 
the provisions of this act, shall be subject to the re- 
quirements of existing law and the regulations of the 
mint service governing the methods of determining 


the amount of pure silver contained, and the amount 
of charges or deductions, if any, to be made. 

"Section 5. That so much of the act of February 28, 
1878, entitled 'An act to authorize the coinage of the 
standard silver dollar and to restore its legal tender 
character,' as requires the monthly purchase and coin- 
age of the same into silver dollars of not less than $2,- 
000,000 nor more than $4,000,000 worth of silver bul- 
lion, is hereby repealed. 

' ' Section 6. That upon the passage of this act the bal- 
ances standing with the Treasurer of the United States 
to the respective credits of national banks for deposits 
made to redeem the circulating notes of such banks, 
and all deposits thereafter received for like purpose, 
shall be covered into the Treasury as a miscellaneous 
receipt, and the Treasurer of the United States shall 
redeem from the general cash in the Treasury the cir- 
culating notes of said banks which may comxC into his 
possession subject to redemption; and upon the certifi- 
cate of the Comptroller of the Currency that such notes 
have been received by him and that they have been 
destroyed and that no new notes will be issued in their 
place, reimbursement of their amount shall be made to 
the Treasurer, under such regulations as the Secretary 
of the Treasury may prescribe, from an appropriation 
hereby created, to be known as the national bank note 
redemption account ; but the provisions of this act shall 
not apply to the deposits received under section 3 of 
the act of June 20, 1874, requiring every national bank 
to keep in lawful money with the Treasurer of the 
United States a sum equal to five per cent, of its cir- 
culation, to be held and used for the redemption of its 
circulating notes; and the balance remaining of the 
deposits so covered shall, at the close of each month, be 
reported on the monthly public debt statement as debt 
of the United States bearing no interest. 

"Section 7. That this act shall take effect thirty days 
from and after its passage. ' ' 

This silver purchasing law, as it finally passed Con- 


gress, was the offspring of the fertile brain of John 
Sherman, and future events demonstrated that it was 
so cunningly planned that it terminated in making 
silver a credit money. 

Senator Sherman, who, as chairman of the Commit- 
tee on Finance of the United States Senate, succeeded 
in getting this bill through Congress, afterward pub- 
licly stated that this measure was for the express pur- 
pose of defeating the free coinage of silver. 

On August 30, 1893, Senator Sherman delivered a 
speech urging a speedy repeal of the law for the pass- 
age of which he had bent all his energies to secure in 
1890. He said: — 

"Our Democratic friends have denounced this pur- 
chasing clause as a miserable makeshift. It was a 
makeshift, but I think a good one to defeat the free 
coinage of silver on the ratio of i6 to i. I believe in 
this respect it has rendered the country an enormous 
service. ' ' 

With unparalleled brazen effrontery, he stated in his 
Memoirs, lately published, that he would have voted 
for the repeal of this law within ten days after its 
passage, after he had by this means defeated the free 
coinage measure proposed by the Senate. 

x\n examination of the provisions of the act of July 
14, 1890, in connection with the circumstances attend- 
ing its passage, will exhibit some remarkable facts. 

In substance, the Secretary of the Treasury was 
authorized to purchase, from time to time, silver bul- 
lion to the aggregate amount of 4,500,000 ounces, or 
as much thereof as would be offered in each month 
at the market price, not exceeding §1 for each 371.25 
grains of pure silver. And in payment of such bul- 
lion. Treasury notes of the United States were to be 


prepared by the Secretary of the Treasury in denomi- 
nations of not less than $i nor more than $i,ooo. 
That the Treasury notes so issued should be re- 
deemable on demand, in coin, at the Treasury of the 
United States, or at the office of any assistant treas- 
urer of the United States, and, when so redeemed, 
could be reissued. 

That no greater or less amount of such notes should 
be outstanding at any time than the cost of the silver 
bullion and the standard silver dollars coined therefrom, 
then held in the Treasury, purchased by such notes. 
That such Treasury notes should be a legal tender in 
payment of all debts, public and private, except where 
otherwise expressly stipulated in the contract. That 
such notes should be receivable for customs, taxes, 
and all public dues, and when so received could be 
reissued. That such notes could be counted a part of 
its lawful reserve by any National Banking Association. 
That, upon demand of the holder of any of the Treas- 
ury notes so issued, the Secretary of the Treasury 
should redeem such notes in gold or silver coin, at his 
discretion. That it was the established policy of the 
United States to maintain the two metals on a parity 
with each other upon the present legal ratio, or such 
ratio as may be provided by law. 

Section 3 of this act was so cunningly contrived that 
it operated to hoard up the silver dollars coined 
under this law. 

This section to which we direct the attention of the 
reader is as follows : — 

"That the Secretary of the Treasury shall each month 
coin 2,000,000 ounces of the silver bullion purchased 
under the provisions of this act into standard silver dol- 


lars until the first day of July, 1891, and after that time 
he shall coin of the silver bullion purchased under the 
provisions of this act as much as may be necessary to 
provide for the redemption of the Treasury notes herein 
provided for. ' ' 

The language of this section provided for the redemp- 
tion of the Treasury notes in silver dollars, when not 
taken in connection with section 2. 

The inference to be drawn from this language which 
we have quoted is, that for every dollar in Treasury 
notes emitted for the purchase of silver bullion, a 
sufficient number of dollars must be coined therefrom 
to redeem these notes. To maintain an adequate 
supply of such silver dollars available for the redemp- 
tion of such notes, they must be kept inviolate in the 
Treasury for that identical purpose. This would pro- 
hibit them from going into circulation. vStored up in 
the Treasury vaults by a literal interpretation of this 
language, a large accumulation of these dollars would 
be inevitable, and would afford a President and Secre- 
tary of the Treasury, unfriendly to silver, an oppor- 
tunity to point to them as evidence that they were not 
desired as money for actual circulation. This was 
actually done by President Cleveland in his message of 
August 8, 1893, in which he advised the speedy repeal 
of the purchasing clause of this law. In that docu- 
ment, he pointed out that the silver coin and bullion 
in the Treasury had increased more than $147,000,000 
between the ist of July, 1890, up to the 15th of 
July, 1893. 

Hence, it will be seen that the silver dollars coined 
under this law could be hoarded up in the Treasury at 
the mere will of the Secretary, while, at the same 


time, he could use his discretion in redeeming such 
Treasury notes wholly in gold. 

This policy was carried into effect by Secretaries 
Foster and Carlisle. 

Section 3 also provided that any gain or seigniorage, 
which would be the difference between the coinage 
value of the silver so purchased and its bullion value, 
should be paid into the Treasury. 

Section 4 provided that so much of the Bland- Allison 
act of February 28, 1878, in so far as it required 
the monthly purchase and coinage of silver bullion into 
silver dollars of not less than $2,000,000 nor more than 
$4,000,000 should be repealed. 

Section 6 of this act provided that, upon its passage, 
the legal tender notes deposited by the national banks 
for the redemption of the circulating notes of such 
banks, and all deposits thereafter received for like pur- 
pose, should be paid into the Treasury as a miscellane- 
ous receipt, and that national bank notes should be 
redeemed out of a fund to be created and known as the 
national bank note redemption account. 

When we construe the propositions embraced in the 
act of July 14, 1890, we ascertain, — 

"First, That the free coinage system, which had 
existed prior to 1873, was absolutely destroyed by this 
enactment ; and that the purchase of silver bullion by 
the Government made this metal a mere commodity ; 
while the holder of gold was granted the privilege of 
taking his bullion to the mints and have it coined into 
money of unlimited legal tender debt-paying power. 

*' Second, That the purchase of 4,500,000 ounces of 
silver per month, would not exhaust its annual produc- 
tion, but a large surplus would remain on the market, 
the presence of which would inevitably result in a 
depreciation of its bullion value — the value of silver 


produced during 1890 was, $70,464,000 and its price 
per ounce was $1.05." 

Therefore, the production of silver for that year was 
not less than 70,000,000 ounces. The total amount of 
silver provided for by the Sherman law was 54,000,000 
ounces per annum, leaving an annual surplus of 16,- 
000,000 ounces to act as a depressing element on the 
price of silver. 

Moreover, this surplus would accumulate year by 
year, gradually but surely lowering the bullion price 
of silver. In one respect, the policy embodied in the 
Sherman law was similar to that of the Bland-Allison 
law in this, that, while these two laws professed to 
solve the silver question, they aggravated the mischief 
by affording a greatly limited market for silver, and 
consequently a restricted demand for it with a resultant 
fall of price. 

The abolition of free coinage of silver, and its pur- 
chase and coinage on government account alone, was 
adopted at the cunning suggestion and at the instiga- 
tion of John Sherman. 

The object of this policy, by which the Government 
purchased silver and coined it into dollars, was a 
shrewd scheme to make silver a mere credit money 
redeemable in gold alone. Should the silver dollars 
so coined fall in bullion value, a demand would be 
made upon Congress to maintain the public credit by 
guaranteeing the bullion parity of the silver dollar with 
that of gold. 

Under the provisions of the Sherman law, the Secre- 
tary of the Treasury could go into the open market 
and buy silver from the lowest competitive bidder, 
and that process meant a continual fall in its price. 


The Government became a "bear" in the silver 

One feature of the Sherman law that was extremely 
vicious, was couched in that provision forbidding the 
Secretary of the Treasury to pay more than one 
dollar for each 371. 25 grains of pure silver. A max- 
imum price was fixed beyond which the Secretary 
could not go ; but there was no minimum below which 
he could not buy. This provision was a statutory 
declaration of hostility toward silver. 

The policy of England, in fixing the price of gold to 
be paid by the Bank of England, established a min- 
imum, below which that bank could not go on penalty 
of forfeiture of its charter. 

The financial system of the United States, as it was 
embodied in the so-called Sherman law, aimed at the 
destruction of the value of silver, of which it was the 
largest producer in the world; the policy of Great 
Britain aimed at the enhancement of the value of 
gold, of which it was the largest holder. 

In payment for the silver purchased, the Secretary 
of the Treasury was authorized to issue Treasury notes, 
redeemable on demand, in coin, at the Treasury of the 
United States, or at the office of any assistant treas- 
urer of the United States, and when so redeemed, they 
could be reissued. 

Coin meant gold and silver at the time this law came 
in force. While the first part of the act declared these 
notes redeemable in coin, a subsequent clause of the 
same section provided, — 

"That upon demand of the holder of any of the 
Treasury notes herein provided for, the Secretary of 
the Treasury shall, under such regulations as he may 


prescribe, redeem such notes in gold or silver coin at 
his discretion, it being the established policy of the 
United States to maintain the two metals on a parity 
with each other upon the present legal ratio, or such 
ratio as may be provided by law. " 

This last clause made the whole section ambiguous. 
The first clause declared the Treasury notes redeem- 
able in coin ; the last clause makes them redeemable 
in gold or silver coin. 

The reader will notice how cunningly this redemption 
clause is worded. The Secretary of the Treasury was 
ordered to redeem the Treasury notes in gold or silver 
coin, not gold and silver coin. 

Hence, the Secretary of the Treasury, in his discre- 
tion, could redeem the Treasury notes in either kind 
of coin. 

The ablest writers on law have always pointed out 
the dangers of leaving the execution of laws subject 
to the discretion of those officers whose duty it is to 
carry them into effect. 

Many of the most valuable rights of man have been 
thrown away, by vesting too much authority in the 
discretion of those officials whose duty requires them 
to properly execute laws. 

That is the best law which leaves the least to the 
discretion of the authority appointed to execute it. 

One other singular provision of this measure reads as 
follows : — 

"It being the established policy of the United States 
to maintain the two metals on a parity with each other 
upon the present legal ratio, or such ratio as may be 
provided by law. ' * 

This language drew an invidious distinction between 
the coin and the metal of which it is composed. 


The clause does not say parity of the two coins, but 
metals. Should this provision be construed against 
the United States, the Government would become the 
guarantor of the value of the bullion in the standard 
silver dollar, should its value be less than that in the 
gold dollar. Silver would become a mere credit money 
redeemable in gold. 

This parity clause constituted the *' endless chain" so 
graphically described by President Cleveland in his 
special message to Congress in August, 1893. 

Should the Secretary of the Treasury surrender his 
discretion of redeeming Treasury notes in gold or sil- 
ver coin, this parity clause would subserve two dis- 
tinct purposes, — 

First, It would convert every Treasury note into a 
vehicle for transferring the gold in the Treasury to the 
vaults of the national banks. • 

Second, This process of redemption in gold would 
give the national banking money power an opportunity 
to unsettle business by bringing on a panic, and to 
demand the withdrawal and destruction of the green- 
backs and Treasury notes. 

The Treasury notes issued under the law of 1890 
were mere promissory notes payable on demand, and 
had the act which authorized their issue made them 
redeemable in the silver dollars coined out of the bull- 
ion purchased under that law, the national banking 
money power, and the gold speculators of London and 
New York City could not have drained the Treasury 
of its gold reserve. 

It is unquestionable, that the so-called Sherman law 
was ambiguously worded by its authors with the ulti- 
mate design of seriously impairing the value of silver. 

However, the large amount required under the pro- 


vision of that act served to steady its bullion value, 
reckoning that value from a gold basis. 

Moreover, the issue of Treasury notes utilized to 
purchase the required amount of silver added many 
millions to the volume of money in circulation. Con- 
sequently the prices of agricultural products were en- 
hanced, and the power of Russian and Indian competi- 
tion in the wheat markets of the world was measurably 

In speaking of these facts in his report of 1890, Sec- 
retary Rusk, of the Department of Agriculture, said : — 

"The recent legislation looking to the restoration of 
the bi-metallic standard of our currency, and the con- 
sequent enhancement of the value of silver, has un- 
questionably had much to do with the advance in the 
price of cereals. The same cause has advanced the 
price of wheat in Russia and India, and in the same 
degree reduced their power of competition. English 
gold was formerly exchanged for cheap silver, and 
wheat purchased with the cheaper metal was sold in 
Great Britain for gold. Much of this advantage is 
lost by the appreciation of silver in those countries. 
It is reasonable, therefore, to expect much higher 
prices for wheat than have been received in recent 
years. ' ' 

Despite those ambiguities and inconsistencies that 
were embraced in the provisions of the so-called Sher- 
man law, and which were craftily designed by its 
framers to cripple the coinage of silver as a medium of 
exchange, the addition of the Treasury notes to the 
circulation had raised prices correspondingly in the 
United States. Secretary Rusk admitted the fact. 

So marked was this effect, that President Harrison 
made special reference to the matter in his message in 
December, 1891. 


Hence, the national banks were planning to array 
their concentrated power against the issuance of the 
Treasury notes, the control of which had temporarily 
escaped their grasp. 

Soon after the introduction of the Windom Silver 
Bullion Purchase Bill, the Secretary of the Treasury 
attended a banquet at New York City as the guest of 
the associated bankers. While in the act of delivering 
an address, Mr. Windom was suddenly prostrated by 
an attack of apoplexy which proved fatal. 

The President chose Hon. Charles Foster, of Ohio, 
as his successor. The new Secretary of the Treasury 
was a national banker, and had earned some reputa- 
tion as an adroit politician. 

Prior to the appointment of Mr. Foster as Secretary 
of the Treasury, United States bonds were rapidly 
rising in value until they were worth from 25 to 29 
per cent, above par. 

In the meantime, the banks of New York City, 
Boston, and other financial centers of the East, were 
hoarding up gold, Treasury notes of the issue of 1890, 
and greenbacks. 

The object of this combined action of the Eastern 
national banks, in thus hoarding up these various 
kinds of money, was for the purpose of embarrassing 
the Treasury of the United States. While these banks 
were engaged in this operation, the bond-holding 
syndicates of Europe had united to force Austro- 
Hungary to convert her immense debt of $2,400,000,- 
000 into gold bonds, which was a part of the scheme to 
handcuff the whole civilized world to the single stand- 
ard of gold. 

While the syndicates of Europe were engaged in 


carrying out their schemes against Austria, the na- 
tional banking money power of the East had matured 
a plan to sell its bonds at a high premium, a process 
which would have netted them a profit ranging from 
25 to 29 cents on the dollar. 

The purpose of this combination was two-fold; in 
the first place, the bankers would gain this great 
premium by the redemption of their bonds, and this 
redemption would result in draining the Treasury of 
its gold ; as a next step, a demand would be made by 
them for the issue of new bonds to replenish the gold 
reserve. These bonds would be purchased by the 
same clique who had sold the former bonds and gained 
millions by the operation. 

During this time, the financiers of Austria had con- 
cluded to fund the bonds of that country into gold 
obligations, a policy to which they were forced by the 
Rothchilds who had her by the throat. 

To effect these funding operations, gold must be 
secured somewhere to execute the mandates of the 
money kings of Europe. 

The Bank of England held immense reserves of 
gold; the Bank of France had yet far more; Russia 
had a vast treasure exceeding $500,000,000. 

Notwithstanding these facts the necessary gold could 
not be drawn from the Bank of England by Austria 
to effect her funding operations, for, at the first 
attempt of the latter to obtain gold in London, this 
great bank would immediately raise its price, a prac- 
tice to which it had always resorted to prevent the 
exportation of gold from England. 

Neither could it be obtained from the Bank of 
France, whose charter forbade it to pay out more than 



five per cent, in gold for export at any one time. The 
Bank of France was under rigid supervision of the 
Government, and it was the servant of the French 
Republic, not its master. 

The immense accumulations of gold in Russia were 
unassailable, as that Empire would not pay out a 
single rouble in gold. 

Hence, the only source of supply of gold, to which 
resort could be had by Austria, was that stored up in 
the United States Treasury and in the banks of New 
York City. 

These banks had hoarded up more than $200,000,000 
of gold, a fact of which they boasted. They would 
not pay out a dollar of their immense holdings of this 
coin, as it would be utilized by them to buy up any bonds 
that might be issued to maintain that absurd thing 
known as the "gold reserve." 

But one great obstacle lay in the way of withdraw- 
ing gold from the Treasury for export, and that was 
embraced in section 2 of the Sherman law of July 14, 
1890, which provided that the Secretary of the Treasury 
should redeem the treasury notes of 1890 in gold or 
silver coin at his discretion. 

The option, or right, of this Government to redeem 
its treasury notes in either gold or silver coin was 
vested in the discretion of the Secretary of the 

This discretion, or option, was the sole barrier in 
the path leading to the Treasury of the United States. 

With the object of ascertaining the policy of Secre- 
tary Foster, a grand banquet was given at the Del- 
monico restaurant by the New York bankers, and Mr. 
Foster was invited to attend as the special guest of 
the occasion. 


The Secretary accepted the generous hospitality of 
these financiers, and again the Mountain journeyed 
to Mohammed. 

After these distinguished patriots had feasted them- 
selves on the costliest viands of the season, and had 
imbibed large quantities of sparkling champagne, 
these financiers called upon the honorable Secretary to 
state his position upon the redemption of the treasury 
notes and greenbacks. He was also requested to 
define his actual powers with reference to issuing 
bonds to maintain the gold reserve. 

The eminent Secretary, inspired by these represent- 
atives of great wealth, gathered around the festal 
board, and buoyed up by the elevating influence of 
the champagne furnished by these money kings, then 
and there declared that he would redeem the Treasury' 
notes and greenbacks in gold, and that he would per- 
severe in that policy. The Secretary said: — 

"The Resumption Act confers authority upon the 
Secretary of the Treasury to issue bonds to any extent 
that he may be called upon to do, and to increase, 
maintain, or decrease his gold reserve. The act of 
July 14, 1890, commands me to preserve the parity of 
gold and silver. It has always been the custom of this 
country to pay its obligations in gold, and therefore 
should there be any trouble about this, and the present 
hundred millions of gold, or the Reserve Fund, were to 
be called out or intrenched upon, it would be within the 
Secretary's power to issue bonds for gold up to five per 
cent, and to replace or increase that Reserve Fund." 

Thus, at the banquet table of these Belshazzars of 
New York City, Secretary Foster transferred the 
option of the Government to redeem its notes in gold 
or silver to that horde of money lords, the presidents 
of the associated national banks of New York City. 


These bank presidents at once communicated the 
decision of Secretary Foster to their allies in Europe, 
and an understanding was had between the money- 
power of the United States and Europe, that the 
national banks of New York City would supply the 
Treasury notes necessary to deplete the Treasury of its 

The interests of the financiers of the East and of 
Europe were identical, and the oflEer of the one was 
accepted by the other. 

At the time of this Delmonico banquet, there were 
eight varieties of money in circulation in the United 
States, exclusive of subsidiary silver, nickel, and cop- 
per coins, viz. : — 

First, gold coin, with unlimited legal tender for all 
debts of every kind, public and private. 

Second, gold certificates, limited to the amount of 
gold deposited in the Treasury, not legal tender, but 
could be counted as part of the national bank reserves, 
receivable for all public dues, and could be reissued 
by the Government. They were redeemable in gold 
coin alone. Gold certificates were the paper represent- 
atives of the gold as a more convenient form of that 
coin; and their denominations ranged from $20 to 

Third, Silver dollars, the coinage of which since 1878 
had been limited, of full legal tender for all debts, 
except where otherwise specified in the contract, 
receivable for all taxes due the United States and 
exchangeable for silver certificates. 

Fourth, Silver certifi6ates, limited to the amount of 
silver dollars deposited in the Treasury by their 
holders, not legal tender, but could be counted as part 


of bank reserves, receivable for all dues by the Gov- 
ernment, redeemable in silver dollars alone, their 
denominations ranged from $i to $i,ooo. 

Fifth, United States notes, known as greenbacks, 
their volume limited by the law of 1878 to $346,681,- 
106, unlimited legal tender for all debts, public and 
private, except duties on imports and interest on the 
public debt, redeemable in coin in sums of §50 and 
upwards at the sub-treasuries of New York City and 
San Francisco. The denominations were identical 
with those of the silver certificates. 

Sixth, Currency certificates, limited by amount of 
United States notes deposited therefor, not legal ten- 
der, could be counted as part of the national bank 
reserv^es, not receivable by the Government for taxes, 
exchangeable for United States notes, redeemable in 
that money at the sub-treasury where issued. Their 
denominations ranged from $5,000 to §10,000. 

Seventh, Treasury notes of 1890, issued for the pur- 
chase of silver under the Sherman law, unlimited legal 
tender, unless otherwise specified in the contract, 
receivable for all dues by the United States, exchange- 
able for all kinds of money except gold certificates, 
redeemable in coin in sums of not less than $50 at the 
United States Treasury and the various sub-treasuries. 
Their denominations were the same as silver certifi- 

Eighth, National bank notes, printed by the Govern- 
ment, and given to national banks, limited to ninety 
per cent, of the United States bonds deposited there- 
for in the Treasury, legal tender for payment of debts 
to national banks, for dues to the United States except 
duties on imports, are legal tender for payments by 


the United States, except interest on the public debt 
and redemption of currency, redeemable in lawful 
money at the issuing bank and at the Treasury. Their 
denominations are the same as United States notes 
with the exception of one and two dollar notes. 

Under the redemption features of the national bank 
law, by which national bank notes were redeemable in 
greenbacks, these bank notes were really redeemable 
in gold. The circulating notes of national banks could 
be presented to the Treasury Department for redemp- 
tion in greenbacks, and this latter currency could 
be immediately presented for redemption in gold. 

Therefore, these bank notes were in reality redeem- 
able in gold at the Treasury of the United States, and 
this scheme of converting these bank notes into gov- 
ernment demand obligations, payable in gold, was 
systematically worked by the national banks. 

Such was the heterogeneous mass of the various 
kinds of coin and currency afloat in the nation. 

To John Sherman, the great necromancer of Amer- 
ican finance, belongs the credit of originating this 
combative and incongruous state of currency. We 
except the silver dollar. 

This system of finance was planned and adopted for 
the sole benefit of the national banks, as it furnished 
them with the means of discriminating against the 
government issues of currency. 

In that conglomerate mass of crudities, the machinery 
necessary to operate the "endless chain" upon the 
gold reserve can be easily seen when taken in connec- 
tion with the parity clause of the Sherman law, as con- 
strued by such eminent financiers as Charles Foster 
and Secretary Carlisle. 


This explanation of the various kinds of coin and 
currency is given here to afford the reader a view of 
the means by which the money power geared up that 
"endless chain," and converted every greenback, 
treasury note, and bank note into buckets that were 
attached to this chain to dip the gold from the Treas- 
ury, and pass it to the control of the foreign and 
domestic gold gamblers. 

On his return to Washington, Secretary Foster 
issued a circular inviting proposals for the purchase 
of bonds by the Government. 

The bankers of New York City at once responded, 
and in seventy-five days the Secretary purchased 
bonds, the face value of which was $75,828,200, but 
for which was paid §86,266,730, a profit to the bankers 
of $10,438,530 in premiums. 

The Secretary also advanced interest to the bond- 
holders nine months before it was due. The amount 
of prepaid interest was $12,009,951. 

The total amount donated to the New York banks 
by this quondam Secretary of the Treasury in the way 
of prepaid interest and premium on bonds was 

Gratuity upon gratuity, franchise upon franchise, 
have been heaped upon the richest men of the nation, 
the very men who caused panic after panic, and who, 
before many months would elapse, would exert their 
immense power to bankrupt tens of thousands of 
business men, throw out of employment hundreds of 
thousands of working men, and force the entire nation 
into a condition of want and misery that was appalling. 

At first these mone37 kings fawned at the feet of the 
Government for special privileges ; before long we will 


see them turn upon and rend the very hand that con- 
ferred these immense pecuniary benefits upon them. 

The national banks of New York City, which, from 
1885 to 1892, received the tremendous sum of nearly 
$70,000,000 in premiums on the bonds held by them, 
prepaid interest to the amount of tens of millions, a 
gratuitous loan of $63,000,000 of the public fimds 
without interest, now saw themselves in a position in 
which they determined to measure their strength 
against that of the Government. 

Secretary Foster, who had transferred the purse of 
the Government into the hands of these money kings, 
met with what might be termed retribution for his 
cowardly surrender to the banking power. He 
became a bankrupt during that great panic of 1893, 
which was brought on by the concerted action of the 
very men who dined and wined him at Delmonico's in 
1 89 1. In his extremities, he called upon his New York 
banker friends for aid; they laughed in his face; he 
was mercilessly driven to the wall. His liabilities 
exceeded $1,000,000, of which he was scarcely able to 
pay ten per cent, on the dollar. 

After the Delmonico episode, the money power 
matured their plans to raid the gold reserve in the 
United States Treasury. 

The construction of the Sherman law, as publicly 
announced by Secretary Foster, made this scheme 
comparatively easy of execution. 

The money kings of Europe, and the national bank- 
ing money power, joined their forces to consummate 
a common purpose, the former to obtain gold out of 
the Treasury and sell it at a premium to Austria, the 
latter to force an issue of bonds and a suspension of 
silver coinage under the Sherman law. 


The way was now clear for this combined money 
power to execute its purpose. The initial step was 
now taken. 

On the 15 th of August, 1892, the firm of Heidel- 
bach, Ickelheimer & Co., Jewish bankers of New 
York City, agents of a foreign syndicate, presented 
$1,000,000 in treasury notes at the sub-treasury in 
that city, and demanded gold for them, and stated 
that they wanted this gold for shipment abroad. 

Without any hesitation. Assistant Treasurer Roberts 
gave this firm the required gold. On this fact becom- 
ing known, a leading journal of New York City inter- 
viewed Assistant Treasurer Roberts with reference to 
this transaction. During the course of the interview, 
Mr. Roberts was asked what steps had been taken by 
the administration to obstruct or prevent the exporta- 
tion of gold. He replied : — 

"No steps have been taken by the administration to 
prevent or obstruct the export of gold. The Govern- 
ment stands ready to meet all its obligations in gold 
and will pay them in gold. ' ' 

In this interview, the Assistant Treasurer gave notice 
that the Treasury stood ready to furnish all the 
gold required by the gold gamblers and foreign bond 
syndicates necessary to place Austria upon a gold 
standard. It would furnish the gold, and the specula- 
tors obtaining it would dispose of it at a premium. 

Thus the promise which the associated bankers of 
New York City had extorted from Secretary Foster, 
in which he declared that he would pay out gold in 
the redemption of treasury notes and greenbacks, was 
a part of the concerted scheme to force the repeal of 
the German law of 1890, and the issue of bonds to 
obtain gold. 


It will be asked, why did these national banks who 
owed their very existence to the Government, and from 
whom they received those valuable franchises which 
earned them billions of dollars, deliberately conspire 
to embarrass the Treasury of the United States? 

First, Because it brought to the aid of these banks 
the most powerful concentration of capital in the 
world, whose interests were identical with those of the 
national banks. 

Second, It would drain the Treasury of its gold, 
and this would force an issue of long-time interest 
bearing bonds, which would serve as a basis for the 
continuance of the national banking system. These 
banks were accumulating gold to buy those bonds, 
while they were assisting the foreign gold speculators 
in their efforts to drain the Treasury. 

Third, It afforded the banks the opportunity of 
demanding the permanent withdrawal from circula- 
tion and the consequent destruction of $500,000,000 
in treasury notes and greenbacks, this currency to be 
supplanted by an equal issue of national bank notes 
donated outright to those institutions. 

Fourth, The national banks could point to the silver 
dollar as depreciated coin, and demand its redemption 
in gold to "Maintain the parity of the metals." 

Fifth, The whole volume of government legal 
tender notes, treasury notes, silver dollars, and silver 
certificates would become mere credit money, and the 
sole legal tender would be gold alone. 

Sixth, It virtually deprived the Federal Govern- 
ment of its constitutional power to fix the value of 
money, and transferred that highest element of sover- 
eignty to the bullion brokers of the world. * 


Seventh, It enabled the national banks to obtain a 
construction of the parity clause of the Sherman law, 
which virtually demonetized silver. 

In the meantime, the House of Representatives had 
passed the iniquitous Force Bill, which went to the 

On January 5, 1891, Mr. Stewart moved to consider 
Senate bill 4675, replacing the Force Bill. The 
motion was agreed to by a vote of 34 yeas to 29 nays. 

On January 14, 1891, the same Senator moved a free 
coinage amendment to this bill, which had been laid 
aside up to that time. 

The amendment was agreed to by a vote of 42 yeas 
to 30 nays. 

Mr. Vest then offered a free and unlimited coinage 
provision as a substitute, and that was agreed to by a 
vote of 39 yeas to 27 nays. 

On January 15, 1891, Senate bill 4675 being the 
substitute offered by Mr. Vest, came up in the House 
of Representatives, whereupon it was referred to the 
Coinage Committee, which, on February 21, 1891, 
made an adverse report on the measure and no further 
action was had on the bill. 

In a report of the Committee on Coinage on one of 
these measures, providing for the free coinage of 
silver, the character of those who appeared before this 
committee at hearings given by it, and opposed the 
free coinage of silver, is thus described : — 

** Almost every man who appeared in opposition to 
free coinage was a president or some other executive 
officer of some bank, some great insurance company 
or other firm, corporation or association controlling 
vast aggregations of capital. ' ' 


With reference to those who were advocating free 
coinage the report says : — 

''Upon the other hand, it may not be out of place 
for us to mention the circumstance by way of contrast, 
that at the conclusion of Mr. Atkinson's statement 
Mr. Dunning, the duly accredited agent of the Knights 
of Labor, and various other kindred organizations 
comprising nearly 4,000,000 voters, stepped forward 
and laid on the table the petition of these toiling 
millions, praying for the free coinage of silver. 

"In additon to this it is proper for us to call atten- 
tion to the further fact that the great organization 
known as the Farmers' Alliance has adopted a demand 
for the free coinage of silver as the cardinal feature 
of its creed. ' ' 

In his message to Congress, December 3, 1891, Pres- 
ident Harrison opposed free coinage, and gave his 
reasons for it in the following language : — 

"I am still of the opinion that free coinage of silver 
under existing conditions would disastrously effect our 
business interests at home and abroad. ' ' 

On July 14, 1892, Senator Sherman introduced a bill 
to repeal the purchasing clause of the law of July 14, 

In the latter part of 1892, and in the months of Jan- 
uary and February, 1893, the foreign gold sj^eculators 
persevered in draining the Treasury of its gold for 
shipment abroad. While this process was being carried 
on, the press of New York City was issuing startling 
reports of the financial condition of the Treasury. 
Some of these journals published daily statements of 
the amount of gold taken out of the country, and 
demanded that Secretary Foster replenish the gold 
reserve by an issue of bonds. Mr. Foster meekly 
obeyed, and on the 23d of February, 1893, he issued 


a written order to the Chief of the Bureau of Engrav- 
ing and Printing, directing him to prepare plates for 
the printing of bonds. 

On hearing of the decision of the Secretary of the 
Treasury to issue bonds, the bankers of New York 
City formed a syndicate for the purchase of the pro- 
posed issue. 

The order to prepare the plates for bonds became 
known to President Harrison, and it was counter- 
manded by him, and he stated that this was a "debt- 
paying administration. ' ' 

So the proposed issue of $100,000,000 of bonds did 
not materialize at this time. President Harrison 
graciously intended that the incoming administration 
of President Cleveland should bear the odium of 
increasing the national debt in time of peace. 

It will be instructive to institute a comparison 
between the financial condition of the producers of 
the country with that of the bond-holding class. 

In speaking of the enormous mortgage and other 
indebtedness of the West and South in 1890, Frederic 
C. Waite said: — 

"Last year, after turning the scale at eight thou- 
sand millions, the mortgage indebtedness continued 
its upward flight, not being contented with an increase 
of 220 per cent., or nearly four times the increase in 
the true value of real estate. 

"In a word, the total net private indebtedness of 
the American people equaled, in 1880, but $6,750,- 
000,000. Last September it amounted to nineteen 
thousand seven hundred millions, an increase of 
thirteen thousand millions in the short period of 
twelve years. ' ' 

Congressman Walker, of Massachusetts, makes the 


total indebtedness of the people of the United States 
reach the grand aggregate of thirty-two billion dollars. 

While the producers were being eaten up by usury, 
the bond-holders were receiving from twenty-five to 
twenty-nine per cent, premium on their bonds. 

In 1866, the national debt was $2,783,000,000, the 
gold value of which at that time did not exceed 
$1,100,000,000. Up to the early part of 1893, $1,756,- 
000,000 had been paid on the principal; the payments 
of interest were $2,538,000,000, $58,000,000 were paid 
in premiums, making a total payment of $4,352,000,000. 
The amount due in 1893 was $1,027,450,000, and this 
residue of the debt would purchase more of the prod- 
ucts of labor than the original amount. In 1866 the 
entire debt could have been paid w4th 1,007,000,000 
bushels of wheat at the price it then brought. 

After this vast amount of interest, principal, and 
premium was applied on this debt as stated above, it 
would require 2,054,900,000 bushels to pay the residue 
of the debt in 1893. 

In 1867, 14,184,000 bales of cotton would have paid 
the total debt. 

In 1893, at the price for which cotton sold, it would 
require 34,251,600 bales of that product to pay the 
remainder of the debt. 

This after $4,352,000,000 were paid thereon. 

The profits of the national banking money power, 
from 1872 to 1891, on its circulating notes donated to it 
by the Government were, according to the New York 
World Almanac, $1,081,988,586. 

Such were the results of that British scheme of 
finance which was fastened on the American people. 

Those who are wedded to the delusive idea of pro- 


tection, as the panacea for the ills now seriously affect- 
ing all industries, must bear in mind that this frightful 
condition of the producer sprung up under the highest 
tariff laws since 1861. 



"Against the insidious wiles of foreign influence (I 
conjure you to believe me, fellow citizens) the jealousy 
of a free people ought to be constantly awake, since 
history and experience prove that foreign influence is 
one of the most baneful foes of Republican Govern- 
ment. ' ' — George Washington. 

"Let us found a Government where there shall be 
no extremely rich men and no abjectly poor ones. 
Let us found a Government upon the intelligence of 
the people and the equitable distribution of property. 
Let us make laws where there shall be no govern- 
mental partnership with favored classes. Let us pro- 
tect all in life, liberty, and property, and then say to 
every American citizen, with the gifts that God has 
given you, your brain and brawn and energy, work 
out your own fortunes under a just Government and 
equal laws." — Thomas Jefferson. 

For the purpose of enabling the reader to thoroughly 
understand the nature of the events that w^ould take 
place in 1893, and succeeding years, we will direct 
some attention to the silver agitation in Great Britain 
in 1892. 

It was heretofore stated, that Great Britain was the 
first nation to adopt a single standard of gold, and that 
this financial system dates from the year 181 6. 

In many respects, England is the most wonderful 
country on the face of the earth. Her colonial posses- 
sions are immense, all of which enjoy some degree of 
self-government, except that of India, which is gov- 



erned exclusively by a Viceroy appointed by the home 

India has an area of 1,500,000 square miles, inhabited 
by a population numbering 285,000,000 of industrious 

Prior to June 25, 1893, India was on a silver stand- 

Before the United States demonetized silver in 1873, 
the production of wheat and cotton in India was insig- 
nificant, and her manufactures of cotton fabrics were 
in their infancy. 

With the demonetization of silver by the United 
States in the year mentioned, the production of wheat 
and cotton in India commenced on a large scale, and 
her manufactures of cotton goods developed very 
rapidly. Her remarkable growth in this direction was 
owing solely to the demonetization of silver by the 
United States and other nations, which action caused 
a tremendous fall in the bullion value of that metal. 

Not only did this develop the resources of India, but 
the latter country became the most dangerous com- 
petitor of the United States in the wheat and cotton 
market of the world. 

In 1866, the first fifty bales of cotton yarn were 
shipped from Bombay, and the growth of the trade 
was not very rapid until 1874. 

In 1875, India exported 1,000,000 pounds of cotton 
yarn, the following year 5,000,000 pounds, this had 
increased annually until 1889, when its exportation 
reached 65,000,000 pounds. In 1891, the exports of 
cotton yam from India were 165,000,000 pounds. Her 
exportations of raw cotton increased at the same ratio. 

The number of cotton mills, from 1876 to 1887, in- 



creased loo per cent, the number of spindles 105 per 
cent., cotton piece goods 243 per cent., and cotton 
yarn 1,058 per cent. 

Prior to 1874, the production of wheat in India was 
very small, but within five years after the demonetiza- 
tion of silver by the United States, she exported 
11,900,000 bushels. 

During the succeeding years, her shipments of wheat 
steadily grew in magnitude, until they reached the 
enormous total of 59,000,000 bushels in 1891. The 
gold price of wheat fell enormously. 

The demonetization of silver by the United States 
operated as an export bounty on the products of India, 
and the greater the fall of silver, the more beneficial 
to the wheat and cotton growers of that Oriental 

The silver coins of India were of unlimited legal ten- 
der debt -paying power. She had no gold coinage. 

Since 1873, the history of prices proves that the pur- 
chasing power of silver over commodities has been 
practically unimpaired, that is stable. This was 
especially true of the silver coins of India. 

This fact was shown by the British Gold and Silver 
Commission of 1886, composed of twelve of the ablest 
financiers of England, six of whom were adherents of 
the gold standard, and the other six bi-metallists. This 
commission made an exhaustive examination into the 
cause leading to the fall of the gold price of silver. 

This commission unanimously reported that the pur- 
chasing power of the rupee continued unimpaired, and 
that the prices of commodities measured in silver 
remained practically the same in that country. 

On page 95 of its final report, the commission said;^ 


"In India, in the opinion of nearly all the witnesses 
whom we have examined, the purchasing power of 
the rupee continues unimpaired and the prices of com- 
modities measured in silver remain practically the 
same. We have no evidence to show that silver has 
undergone any material change in relation to commod- 
ities, although it has fallen largely in relation to gold ; 
in other words, the same number of rupees will no 
longer exchange for the same amount of gold as for- 
merly, but, so far as we can judge, they will purchase 
as much of any commodity or commodities in India as 
they did before. ' ' 

In a separate report, six of these commissioners 
made use of the following language as an answer that 
falling prices result from facilities for production. 
They say : — 

"We are not insensible to the fact that facilities for 
production are habitually increasing, and the cost of 
production is constantly becoming less. But these 
factors have always been in operation since the world 
began; and while we recognize their tendency to 
depress the prices of commodities, they are not, in our 
opinion, sufficient to account for the abnormal fall in 
prices, which has been apparent since the rupture of 
the bi-metallic par, and only since that time. " 

The process by which the depreciation of silver built 
up the industries of India at the expense of those of 
the gold standard countries was apparent. 

When the London merchant went to India to buy 
wheat and cotton, he ascertained that his gold would 
not purchase any more of her products than an equal 
amount of silver expressed at a ratio of fifteen and 
one half to one. 

Therefore, the English merchant would send his 
gold to the United States, and purchase cheap silver 
with it, ship this silver to India and purchase the 


wheat and cotton of that country. If the price of sil- 
ver in London was 65 cents per ounce, the English 
merchant would buy exchange on the United States to 
the amount of $13,000; with this he could purchase 
20,000 ounces of silver bullion. This bullion, when 
shipped to India, would be worth the mint price of 
$1.33 per ounce. With this cheap silver, the wheat 
merchant would find it more profitable to buy Indian 
wheat at $1.20 per bushel, than to purchase the same 
product in the United States paying therefor 75 or 80 
cents per bushel reckoned on a gold basis. 

In a few years after the demonetization of silver by 
the United States, the English rejoiced at the blow 
which was thus dealt to American commerce. 

At a meeting of the British and Colonial Chambers 
of Commerce, held in London in 1886, Sir Robert N. 
Fowler, a member of Parliament, a banker, and an 
ex-mayor of London, said : — 

"That the effect of the depreciation of silver must 
finally be the ruin of the wheat and cotton industries 
of America, and be the development of India as the 
chief wheat and cotton exporter of the world. ' ' 

At the same time that the export trade of India 
grew so rapidly, she manufactured more largely for 
herself. The reason was obvious. 

Should she attempt to import foreign manufactured 
goods from gold standard countries, the rate of 
exchange against her would be equal to the deprecia- 
tion existing between her silver compared to the gold 
of the nation from whom she would purchase. 

To illustrate : Suppose a merchant of Bombay or 
Calcutta proceeded to England and purchased goods 
to the amount of 100,000 sovereigns, it would require 


gold coin for the payment of them, as the standard of 
value there is gold. He would find it necessary to 
convert his silver rupees into exchange on London, in 
order to obtain the gold, to pay for the goods, and the 
result would be that he would lose the difference 
between the bullion value of the silver compared with 
that of gold. Consequently, this loss of exchange 
would be an insurmountable obstacle in the way of his 
silver standard country purchasing from that which 
was on a gold basis. This would stimulate home 
manufactures in silver using countries, that is — those 
nations on a silver basis. 

This difference in the loss of exchange would oper- 
ate more effectively, in restricting foreign importa- 
tions into silver standard countries, than the most 
rigid protective tariff laws ever enacted. 

Another very important effect of the disparity 
between the value of gold and silver in the commercial 
intercourse of nations would be as follows: — First, 
Those nations on a silver basis would trade with each 
other, the population of which by far exceeded that of 
the gold standard countries; second, England would 
be the greatest sufferer should India continue on a sil- 
ver standard. 

These two conclusions were fully borne out by sub- 
sequent events. The great Oriental nations purchased 
immense quantities of manufactured goods from 
India, while there was a great falling off in the sales 
of the same class of merchandise heretofore supplied 
by England. 

The statesmen and financiers of the latter enter- 
tained grave fears, that, if the United States should 
declare for free coinage of silver, it would unite the 


Western Hemisphere and the silver using countries 
of Asia into a great commercial union, a result that 
would end in making the United States the greatest 
commercial and manufacturing nation on earth. 

These fears were well expressed in a very significant 
editorial in the London Standard, which said: — 

"What if the United States should now join Mexico 
in declaring for the free coinage of silver, and throw- 
ing over gold as too dear. What if the two American 
continents held out the hand to Asia and said : ' Let us 
have the white metal for our standard. ' Chile, now 
hard-hit, would eagerly respond and all the states of 
South America and Mexico, with Japan and China 
and Java — in fact the whole mighty East (which cares 
little for Simla). It is a great danger to which the 
present outburst of alarm and fear must not render 
England oblivious. ' ' 

The great cotton manufactures of the latter nation 
were steadily losing ground in China, Japan, and other 
Oriental countries, and as those valuable markets 
were lost to England, they were gained by colonial 

Moreover, the cheap wheat of India was invading 
the markets of England, to the immense loss of the 
wealthy landed nobility of the mother country. 

These two powerful interests combined in a me- 
morial to the British Parliament, and on April 22, 1892, 
a commission was appointed by the Secretary of State 
for India, with instructions to take evidence upon the 
advisability of closing the Indian mints to the free 
coinage of silver. 

As a striking coincidence, which undoubtedly proves 
that there was an understanding between the money 
power of England and that of the United States, hav- 
ing for its object the annihilation of silver as money, 


we point to the fact, that in a few days after the 
appointment of the commission to investigate free 
coinage of silver in India, Senator Sherman introduced 
a bill in the United States Senate to repeal the silver 
purchasing clause of the so-called Sherman law, at 
that time the only law recognizing silver in this 
country. As further proof that the national banking 
power of America had united with the capitalists of 
England against the use of silver as money, we refer 
to the following circumstance : During the sitting of 
the Herschell Commission, an international monetary 
conference was in session at Brussels. The United 
States was represented at this gathering of the na- 
tions. Ex-Governor McCreary, one of the American 
representatives, in a speech upon silver, said : — 

"Speaking for myself only, I express the opinion 
that the silver law known as the act of 1890, now in 
force in my country, will be repealed. It is possible 
this will be done at the present session of Congress. 
If not this session, I believe it will certainly be 
repealed at the next session of Congress." 

The foreign nations gathered at Brussels, therefore, 
were semi- officially notified that the sole law providing 
for the coinage of silver in the United States would 
be repealed in the near future. 

Henry W. Cannon, a colleague of Mr. McCreary, 
and the president of the Chase National Bank in New 
York City, said: — 

"The United States has seriously taken into consid- 
eration the idea of repealing the Silver Purchase Act of 
1890; the two political parties as well as the great 
bankers of New York have advised this repeal, and if 
during this conference some arrangement is not 
attained, it is more than probable that America will 


not continue disposed to buy annually 54,000,000 
ounces of silver at the market price. " 

Thus the people of the United States were again 
betrayed by their delegates to this conference, and the 
Herschell Commission received notice that the United 
States was opposed to silver. 

At the time this commission was appointed to inves- 
tigate the effects of free coinage of silver in India 
upon the British cotton export trade, England occu- 
pied a commanding position as the great creditor 
nation of the world, her aggregate holdings of stocks, 
bonds, securities, and other forms of public and pri- 
vate indebtedness run into the billions. 

In a speech in the British Parliament, Mr. Gladstone 
eulogized his country as the greatest creditor nation 
on the face of the globe. Amid the boisterous cheers 
of the House of Commons, he declared that Great 
Britain was the creditor of other nations in a sum not 
less than $10,000,000,000! 

Her colonies of Australia, South Africa, and Van- 
couver had risen to be the greatest gold producing 
regions of modern times. Australia alone had long 
surpassed California, we might say the United States, 
in the extent and richness of her gold resources. 
Hence, it was the policy of England to enhance the 
exchange power of gold, as she was the great creditor 
and the great gold producing nation of the present 

Moreover, her imports greatly exceeded the value of 
her exports. Her imports of raw materials and bread 
stuffs far exceeded that of any other nation, and by 
limiting the world's volume of money, and increasing 
the purchasing power thereof, she would be enabled 


to obtain her supplies much cheaper on a single stand- 
ard of gold, than under an universal bi-metallic 

It is almost impossible to grasp the immense extent 
of her commercial power. 

England owns more than three fourths — nearly four 
fifths — of the steamships afloat on the ocean, and 
nearly one half of the sailing fleet of the world, pro- 
viding employment for 350,000 seamen. Her income 
from her merchant marine aggregates $400,000,000 
per annum. 

She aspires to monopolize the trade of Asia, Africa, 
and South America, and by supplying these people 
with the products of her manufactures, she strove to 
provide employment for her dense population. 

The Asiatic and the South American nations were 
chiefly on a silver basis, and this formed a barrier to 
the extension of her trade and commerce. 

Hence, the manufacturing, agricultural, and creditor 
classes of Great Britain demanded relief at the hands 
of the British Parliament, and they pointed to the fact 
that the cotton manufacturers of India were securing 
the control of those markets heretofore supplied by the 
mills and factories of Lancashire; and that the low 
price of English wheat resulted from Indian competi- 
tion. Hence the appointment of this commission at 
the head of which was Lord Herschell. 

Upon the organization of this commission it pro- 
ceeded to take evidence relating to the cause of the 
decline of the British cotton trade in the Asiatic 

Many of the leading cotton manufacturers appeared 
before this body, and gave valuable testimony with 


reference to the causes of the depression existing in 
the cotton manufactures of England. 

Upon the conclusion of its investigations, it made a 
report to Parliament, in which it was pointed out that 
the rise in the price of gold, beginning in 1873, the 
year that silver was demonetized by the United States, 
and the resulting depreciation of silver, had built up a 
large cotton-spinning trade in India. The report 
says : — 

"Soon after the rise of gold began in 1873, a large 
cotton-spinning trade, begun previously in India, with 
English machinery, to supply India itself, felt at once 
the stimulus supplied by the difference in exchange. 
It prospered rapidly, grew, and continues growing fast 
and steadily, and exports to China and other silver 
countries. Here are comparisons of the English 
and Indian exports of cotton yarn, in pounds, to 
China, Hongkong, and Japan, which have for some 
time been supplied annually to the Economist by Mr. 
Abraham Haworth, of Manchester. They show how 
the product of silver wages beats the product of gold 
wages, and beats them more as the divergence between 
the metals widens. 

"The quantities are given in pounds weight. The 
contrast between the stationary quantities from Eng- 
land and the rapid expansion of the Indian export indi- 
cates plainly a sad future for Lancashire trade if gold 
wages there must continue competing with silver 
wages in foreign markets. India will on the present 
footing beat Lancashire everywhere, meanwhile in 
the large class of goods made of Indian cottons, but 
ultimately in any material. ' ' 

It then proceeds to give statistics showing that from 
1876 to 1 88 1, England annually exported to China 
a and Japan, cotton goods valued at $38,560,000. India 
exported only $19,641,000. From 1882 to 1887, the an- 


nual exportations of England had fallen off to $33, 682,- 
000, while India had increased from $19,641,000 to 
$71,319,000. In 1 888, England sent to China and 
Japan $44,642,600 worth of cotton goods, while the 
exportations of India to these two countries increased 
from $71,319,000 in 1887, to $114,707,300 in 1888. In 
1889, England sent to China and Japan $35,720,200 of 
these cotton goods, and India sold $126,766,800 against 
$114,707,300 the preceding year. 

In 1890, England exported to China and Japan $38,- 
057,400. In the meantime, in the same year, the 
Indian export increased from $126,766,800 to $145,- 
112,800 worth of cotton manufactures, and it was time 
for the English merchants to stop this rivalry. The 
child had outgrown the parent. The colonial manu- 
facturers had taken away the market in Japan and 
China, and it was necessary to do away with silver in 
order that the monopoly of this Eastern trade might 
go back where it had originally been, to the English 
manufacturer and the English merchant. 

The conclusions of this commission, based on an 
exhaustive investigation into the causes of the decline 
of the British cotton trade, demonstrated that the 
continued depreciation of the gold price of silver acted 
as a rigid protective tariff against the manufactures of 
gold standard England ; and, that owing to the loss of 
exchange which would accrue to silver standard coun- 
tries trading with those on a gold basis, the former 
would naturally trade with each other to the exclusion 
of the latter. The only loss that would accrue to India 
was in those cases in which she owed debts to Eng- 
land; for, by conversion of her silver coin into British 
sterling exchange drawn to discharge these obligations. 


she would lose the difference between the bullion value 
of silver and that of gold. 

But for this loss, she was amply compensated by the 
immense growth of her trade and manufactures, 
through which her means of payment were proportion- 
ately increased. 

During the sittings of this commission, the United 
States was in the midst of the presidential campaign 
of 1892. 

For the third time Grover Cleveland obtained the 
Democratic nomination for President, although there 
was considerable opposition to his candidacy. 

As he had thrown down the gauntlet to the highly 
protected manufacturing interests in his message of 
1887, he was regarded as the leader of his party. 

In the election of 1888, he had received a large plu- 
rality of the popular vote, and it seemed poetic justice 
that he should measure strength with his opponent of 

The Democratic platform denounced the Sherman 
Silver Purchasing law as "A cowardly makeshift, ' ' and 
demanded its repeal. 

The term "makeshift" in the sense in which it was 
used, meant that it was an obstacle to the free coinage 
of silver, and that this was the reason why a law of 
that character was adopted by the Fifty-first Congress 
— which became odious as the "billion-dollar Con- 
gress." In 1893, during the debate upon the repeal of 
the purchasing clause of the Sherman law. Senator 
Sherman admitted that this law was designed solely 
for the purpose of defeating the free coinage of silver. 

The Democratic platform severely denounced the 
McKinley tariff law of 1890, "As the culminating 
atrocity" of tariff legislation. 


One of the most iniquitous features of this measure 
was the sugar bounty clause, by which the sugar 
growers of Louisiana and Vermont received large 
sums of money from the general Government for their 
sugar product. This inured to the benefit of a few 
millionaire sugar planters, one of whom in a single 
year received the great sum of $464,000 as his share 
of the sugar bounty. 

The Republican convention re-nominated President 
Harrison and endorsed the McKinley tariff law. 

Mr. Cleveland was elected by an immense majority 
of the electoral vote, and his plurality of the popular 
vote over President Harrison was more than three 
hundred thousand. 

Immediately after the election of Mr. Cleveland, 
the national banking money power began to lay plans 
to force the country upon a single standard of gold, 
and to increase the volume of their circulating notes. 

On December 6, 1892, Congressman Harter, a 
national banker, introduced a bill in the House pro- 
viding for the unconditional repeal of the Silver Pur- 
chase law, and to replenish the gold reserve of the 
United States Treasury. 

To add to the clamor against the silver dollar, Mr. 
Harter, a member of Congress from Ohio, successfully 
endeavored to array the Grand Army of the Republic 
against the continued purchase and coinage of silver. 
He secured lists of the members of the various posts 
throughout the country, but more particularly address- 
ed himself to those that were situated in Democratic 
Congressional districts. Circular letters, printed by 
the Government, were mailed by him to many thou- 
sands of pensioners, informing these veterans that 


their pensions would be paid in "seventy-cent dollars," 
and requesting them to join in memorials to their 
Representatives in Congress to vote for the repeal ©f 
the purchasing clause of the Sherman law. 

Democratic Senators and members of Congress 
received thousands of these letters from their constit- 
uents, thus inspired, requesting them to vote for a 
single standard of gold. 

This outrageous interference of Mr. Harter with 
the constituents of other members of Congress received 
scathing rebukes on the floors of Congress. 

This was a part of the program of the money power, 
and it practically served notice on the Herschell Com- 
mission that the United States would cease the further 
coinage of silver, and that this country was apparently 
in sympathy with the financial policy of England. 

The money power of England and America struck 
hands, and formed a compact to utterly annihilate 
silver as a money metal everywhere. 

Upon the appearance of the Harter bill in the House 
of Representatives, the bankers of London cabled to 
the New York Evening Post, December 8, 1892, the 
news that "The belief is slightly growing that India 
will assume a gold standard sooner or later. ' ' 

On December 9th, the same journal published a 
cablegram from London, in which it was stated, "That 
the silver question is still paramount. There is a 
belief that the India Council will refrain from making 
sales below some minimum. The Indian Government 
is alleged to be contemplating an immediate change 
of the silver standard to gold. ' ' 

On the same day, Mr. Williams, of Massachusetts, 
brought forward a bill for the unconditional repeal of 
the purchase clause. 


In the meantime, the great journals in the financial 
centers of the country began a crusade for the gold 

On December 9th, the Chicago Tribune, editorially 
said : — 

"Let the Sherman act of July 14, 1890, be repealed 
at once without waiting for an extra session. ' ' 

During this time that these various repeal measures 
were introduced into the House of Representatives, 
and while the American press was clamoring for the 
passage of those bills which would entirely cut off the 
further coinage of silver, the Herschell Commission 
was in session. 

In England, this commission pointed to the efforts 
made in Congress to cut off the further coinage of 
silver as an indication of hostility toward that metal, 
and asserted that the passage of any such bill would 
result in a great depreciation of that metal. 

The introduction of these various bills, seeking to 
repeal the sole law that in anywise recognized silver 
as a money metal, and which consequently steadied 
its bullion value, speedily became known to the Her- 
schell Commission. 

In its report the commission referred to these bills, 
and based its conclusions largely upon the effect of a 
repeal of the purchasing clause by the United States. 

The report stated: — 

"Moreover, a strong agitation exists in the United 
States with respect to the law now in force providing 
for the purchase of silver. Fears have been and are 
entertained that there may come to be a premium on 
gold, and strong pressure has been brought to bear 
upon the Government of that country with a view to 
bring about an alteration of that law. ' ' 


Is it not self-evident, that these various bills to repeal 
the purchasing clause were brought forward in Con- 
gress at this time, with a view to influence the Herschell 
Commission against the continued coinage of silver in 
India? t 

The proposed action of the United States was 
strongly urged as a reason why the mints of India 
should be closed to free coinage. 

Every movement, or proposed movement, made by 
the advocates of a single standard of gold in the 
United States, looking to the complete downfall of 
silver, was speedily transmitted to England. 

In its report the Herschell Commission says: — 

'*In December last a bill was introduced in the Sen- 
ate to repeal the Sherman Act, and that any such 
measures will pass into law it is impossible to foretell, 
but it must be regarded as possible ; and although in 
the light of past experience, predictions on such a 
subject must be made with caution, it is certainly 
probable that the repeal of the Sherman Act would 
be followed by a heavy fall in silver. " 

While the people of England were being frightened 
by the bogy of depreciated silver, which was asserted 
would result from the probable repeal of the Sherman 
Law by the United States, the gold standard advocates 
of America were pointing to the probable closing down 
of the mints of India to the free coinage of silver as a 
reason for repealing the Silver Purchasing law of Jviiy 
14, 1890. 

In this way the money power of England and the 
United States played into the hands of each other. 

At this time, the House of Representatives was 
strongly Democratic, and it was in favor of the use of 
silver as money, and, consequently, the repeal of the 


Sherman Law was impossible as long as no better 
silver measure was proposed as a substitute for this 
''cowardly makeshift." 

In the meantime President-elect Cleveland attempted 
to influence Congress to repeal the Sherman law. 

He delegated Josiah Quincy as his envoy to visit 
Washington, ascertain the sentiments of Democratic 
members of Congress upon the silver question, and to 
make known to these Senators and Representatives 
that he desired the speedy repeal of the Sherman law. 

On December 21, 1892, Senator McPherson intro- 
duced a joint resolution in the Senate, authorizing and 
directing the Secretary of the Treasury to suspend all 
purchases of silver bullions as provided for in the first 
section of the act of July 14, 1890. 

Upon Mr. McPherson 's request the bill was printed 
and laid upon the table, to be called up by him at some 
future time after the holiday recess. 

With reference to the action of this Senator, the 
Chicago Tribune said : — 

"His remarks will be listened to with great interest, 
being regarded as the unofficial expression of the 
views of the President-elect. ' ' 

After the holiday recess, the House reassembled 
January 4, 1893, and Congressman Harter introduced 
a joint resolution similar to that of Mr. McPherson in 
the Senate. 

On February 9th, House Resolution 10143, permitting 
national banks to issue bank notes up to the par value 
of bonds deposited by them was to be made the special 
order of the House, after the bill providing for the 
repeal of the purchasing clause of the Sherman Law 
was passed. 



In every instance, each attempt to suspend the coin- 
age of silver, and to retire the greenbacks, was fol- 
lowed by an effort to confer greater powers and privi- 
leges upon national banks. 

These two Tory- Republican schemes of finance 
always went hand in hand. 

It was evident that none of these measures could be 
forced through Congress at this time. 

On February 12th, Henry Villard, a leading stock 
speculator of New York City, who was charged with 
wrecking the Northern Pacific Railway Company, made 
his appearance in AVashington, and publicly announced 
that he was the envoy of President-elect Cleveland, 
and that it was Mr. Cleveland's wish that the Sherman 
law be repealed. 

The efforts of Mr. Villard to influence Congress 
were fruitless. 

Shortly after the appearance of Mr. Villard at the 
Capitol, Don M. Dickinson put in an appearance at 
Washington as the representative of President-elect 
Cleveland. He likewise informed Congress that the 
incoming President desired the repeal of the Sherman 

The next morning after Dickinson left for Washing- 
ton, the following interview with Mr. Cleveland was 
published in the New York Herald. He said : — 

"The repeal of the Sherman act (unconditionally) is 
the great necessity of the hour. Continuance of the 
silver purchasing operation, made mandatory by the 
Sherman law, is a menace to the business and finan- 
cial interests of the country. I am not yet without 
hope that this law will be repealed by the present 
Congress. Whatever influence I have is being exerted 
to that end. The date at which the repeal should 


become operative is immaterial, save that the sooner 
the better." 

In its editorial comments upon this interview with 
Mr. Cleveland, the Herald said : — 

*'As a party man, as an upholder of the regular 
organization, as a vindicator of the machine, Mr. 
Cleveland will stand on firm ground when he declares 
that every aspirant for office patronage, favor, or any 
consideration, will be expected to line up for the 
repeal of the silver law. ' ' 

A Washington special to the Chicago Tribune, Feb- 
ruary I St, said: — 

' ' President Cleveland is threatening an extra session 
if the silver purchase law is not repealed. Don Dick- 
inson is the bearer of the news. Don has been at it 
all day interviewing Democratic Senators and the 
leaders in the House, including Speaker Crisp. He 
holds a big ugly club in the shape of patronage, which 
is expected to bring Democratic members to time. ' ' 

Notwithstanding the appearance of Don Dickinson 
at Washington, and the implied threats of President- 
elect Cleveland, the Senate defeated a motion to take 
up the bill to repeal the silver law by a decisive vote. 

In the House, the bill which had been introduced 
there was also defeated. 

The actions of President-elect Cleveland, in his 
attempt to force the Legislative Department of the 
Government to submit to his will, met with an inglori- 
ous defeat at the hands of this Congress. 

After the defeat of these various measures the Bank- 
er's Magazine, of New York City, said : — 

"The tumble in the stock market during February 
had for one of its causes, unloading of stocks as fast 
as any one would buy them in anticipation that the 
gold reserve would not be replenished, and that an 


extra session would be called early, and an attempt be 
made to coerce its members into repealing the Silver 
Purchasing Act unconditionally. ' ' 

The Commercial Bulletin said: — 

"The quickest, if not the only way to repeal the 
Silver Purchase law is to precipitate a panic upon the 
country, as nothing short of this will convince the 
silver men of their error, and arouse public sentiment 
to a point which will compel the next Congress to 
repeal the Sherman law whether it wants to or not. " 

While the money power of the United States, aided 
by the press and the unprecedented conduct of Presi- 
dent-elect Cleveland, was engaged in the scheme to 
totally cut off the further coinage of silver, the New 
York banks were withdrawing tens of millions of 
gold from the Treasury and shipping it abroad. At 
the time these banks were" engaged in this transaction, 
they raised the rate of interest on call loans to twenty- 
five per cent. While plundering the Government of 
its gold as a part of the scheme to force an issue of 
bonds, they robbed the people by extorting illegal rates 
of interest. 

Every' step taken by the money power to force a 
repeal of the Sherman law was cabled to London with 
the avowed purpose of influencing England to close 
the Indian mints to the free coinage of silver. Every 
step thus far taken by the money power of the United 
States and of England to strike down silver was in 
pursuance of a well-defined plan to shackle the people 
to an appreciating gold standard. 


OF 1893. 

"The greatest financial mistake of my life was in 
what I had to do with the passage of the present Na- 
tional Bank Act. It ought to be repealed ; but before 
it can be done there will be such a contest between the 
banks on the one side, and the people on the other as 
has never been witnessed in this country." — Salmon 
P. Chase. 

"Fifty men in these United States have it within 
their power, by reason of the wealth which they con- 
trol, to come together within twenty-four hours and 
arrive at an understanding by which every wheel of 
trade and commerce may be stopped from revolving, 
every avenue of trade blocked, and every electric 
key struck dumb. Those fifty men can paralyze the 
whole country, for they control the circulation of cur- 
rency and can create a panic whenever they will." 
— Chauncey M. Depew. 

After the events narrated in the preceding chapter, 
Mr. Cleveland once more assumed the duties of the 
high office to which he was elected. 

His conduct previous to his inauguration, in attempt- 
ing to influence Congress before he was invested with 
the constitutional power to address that body, in the 
official capacity of President, aroused the gravest fears 
of the rank and file of the Democracy. 

With much sorrow, the people saw their chosen idol 
ally himself with the national banking money power, 
and they perceived that he intended to use the immense 
patronage of his office to coerce Congress into submis- 
sion to his will. 



To add further to their misgivings, President Cleve- 
land, in the appointment of editors of influential news- 
papers to highly-salaried offices, evidenced his plain 
purpose to subordinate the press to his views. 

The number of leading journalists appointed by him 
to the most lucrative and honorable posts, far exceeded 
similar appointments made by any of his predecessors. 

To the intense disgust of that great party which had 
so frequently honored him, he relegated tariff reform 
to the background. 

He aggravated this distrust, which was now mani- 
fested against him, by appointing one of the ablest 
corporation lawyers of the country to the office of 
Attorney-General; viz., Hon. Richard Olney. 

The only leading appointment made by him, which 
in anywise allayed this feeling of distrust, was that of 
John G. Carlisle for Secretary of the Treasury. 

During his career in Congress, Mr. Carlisle was the 
ablest opponent of the national banking system and 
a single standard of gold that the country ever knew. 

For logic, argument, and eloquence, his arraignment 
of the money power, in 1878, and 1882, was the most 
notable ever heard in Congress. 

Subsequent events will show that he became the 
greatest apostate to a noble cause that ever appeared 
in American history. 

President Cleveland had long recognized the splendid 
ability of Mr. Carlisle as an opponent to the national 
banking money power, and he resolved to convert him 
into an advocate of that merciless greed which had 
hitherto absorbed the wealth of the people. 

Hence his appointment. 

That the time had come in which to make a bold 


Stroke for the perpetuation of its system, this money- 
power immediately perceived upon the accession of 
Mr. Cleveland to the Presidency. 

This power knew that President Cleveland was a 
man whose firmness, energy, and ability, had been sel- 
dom equaled by any of his predecessors in office, that 
he was a staunch friend of the gold standard and of 
the national banking system, and, therefore, it deter- 
mined to wreck the country, if necessary, to teach the 
people an "object lesson." 

It resolved to bring on a panic, the like of which 
had never been visited upon any people. 

Every monetary panic from which the American 
people had suffered, was the deliberate work of that 
class of men who pompously ascribed to themselves the 
sum and substance of all the financial wisdom of the 

The national banking money power, in planning 
and consummating the panic of 1893, had several ob- 
jects in view. 

First, The permanent withdrawal and destruction of 
the greenbacks and the treasury notes of 1890, amount- 
ing to $500,000,000, and the issue of an equal amount 
of bonds, running from fifty to one hundred years. 
These bonds were to serve as a basis for national bank 
notes, the issue and control of which would net the 
banks at least §40,000,000 in interest per annum. 

Second, The withdrawal from circulation of more 
than 500,000,000 silver dollars, and the substitution 
therefor of an equal amount of bank notes, the loaning 
of which would annually bring the banks an additional 
profit of $40,000,000. 

Bonds were to be issued to take up these dollars. 


the bullion composing them to be thrown upon the 
market and sold as "old junk," to use the phrase of 
National Banker Lyman J. Gage. 

Third, The wrecking of those great railway prop- 
erties of the country which it did not control, by de- 
preciating their stocks and bonds during the panic, 
buying such stocks and bonds at the lowest possible 
figure, thus securing ownership of all the means of 

Fourth, An opportunity to exhibit its power over 
Congress and the people. 

The immensity of this money power is almost beyond 
comprehension. The head and front of this great 
power is the Clearing House Association of New York 
City, composed of the membership of sixty-six national 
banks, whose deposits aggregated nearly a billion of 
dollars in 1893. 

A large part of this vast accumulation of money, held 
by these associated banks, was not loaned to be invested 
in legitimate business enterprises. It was utilized to 
manipulate the price of stocks. 

That accurate financial writer of the New York Sun, 
Matthew Marshall, in the early part of 1893, stated 
that one half of all the loans of these associated banks 
were made to the stock speculators of Wall street, those 
men who organized cliques and rings to wreck railroad 

With few exceptions, the thirteen thousand banks 
scattered over the land obey the dictates of the Clear- 
ing House to the minutest letter. 

New York City is the seat of the most gigantic con- 
centration and combination of capital in the Western 
Hemisphere. It is the home of those great banks, of 


the loan and trust companies, and of the majority of 
the enormously wealthy life, fire, and marine insurance 
companies of the United States. Wall street is the 
arena of the railway, gas, street railway, sugar, coffee, 
and oil magnates. It is a city where a fortune of less 
than ten millions is not considered worthy of public 
notice. The great banking house of Rothchild is ably 
represented by the Belmonts; Lombard street, Lon- 
don, has its agent there in the person of J. Pierpont 

New York City is the center of exchange of America. 
Thirteen thousand banks of the United States, private, 
state and national, continually maintain large deposits 
of money in her national banks for the payment of 

These deposits of money from all parts of the nation 
amount to many millions, and tend to make money 
scarce in the South and West, and concentrate it in a 
few banks in the metropolis. 

According to the provisions of the national banking 
law, the national banks of the great cities of the coun- 
try were selected as the reserve agents of the 3,700 
national banks throughout the country. By that law, 
these banks were required to keep in reserve from 
fifteen to twenty-five per cent, of the total amount of 
deposits in their custody; and they were authorized 
to deposit this great Reserve Fund in the national 
banks of New York City, a system which further added 
many millions of dollars to the holdings of those banks, 
with a consequent drain of money upon all other dis- 
tricts of the nation. The banks of New York City were 
thus enabled, from these iramense accumulations of 
money, to make loans at the low rate of one per cent., 


upon call, to the stock gamblers of Wall street, while 
the rest of the country was suffering from a monetary 

While the legitimate interests of the nation were in 
great need of currency to keep the wheels of industry 
turning, the great banks of New York City, through 
their press, pointed to the great accumulations of 
money there, and the low rate of interest as evidence 
of a superabundance of currency. 

These facts served to quiet the demands of those 
who were pointing to the scarcity of money prevailing 
throughout the West and South. The reserve funds, 
piled up in the banks of New York City, were loaned 
to the banks of the West and South at good rates of 
interest, which, in turn, were loaned by them to their 
customers at rates of usury ranging from eight to 
twelve per cent. , during the season that money was 
needed to move the crops to the seaboard. 

During the month of December, 1894, Mr. Dods- 
worth, editor of the New York Journal of Commerce, 
and George C. Williams, President of the Chemical 
National Bank of New York City, testified before the 
Committee on Currency, that the reserve banks of that 
city loaned this money to the depositing banks at rates 
of interest as high as six per cent. 

Such was the legerdemain, by which the banks of 
that city obtained control of the money of the West 
and South, and exacted usury from the identical banks 
who were the actual owners of this money. 

Closely related to this branch of the subject is the 
enormous amount of profits garnered by the national 

Up to 1894, the amount of interest paid on the bonds 


deposited by these banks to secure their circulating 
notes, reached the magnificent sum of $419,887,111. 

We do not include in this calculation the usury gath- 
ered from their currency or bank notes. 

In its yearly almanac for 1892, the New York World, 
a journal friendly to national banks, shows that the 
profits of those banks, from 1872 toi89i, were the 
vast aggregate of $1,081,998,586. 

Their average capital during that period was $500,- 

There are scores of these banks, which, after distrib- 
uting great dividends to their stockholders, have a 
surplus and undivided profits exceeding their entire 
capital stock. 

These facts are taken from the swbrn reports of the 
officials of these banks. 

At the hearing before the Committee on Currency in 
December, 1894, George C. Williams, President of the 
Chemical National Bank of New York City, gave the 
following sworn statement as to the profits of his 
bank. We here quote the evidence of Mr. Williams 
in reply to the questions of Mr. Warner, a member of 
the committee : — 

Mr. Warner : So that the capital of your bank now 
represents how many millions of dollars? 

Mr. Williams: Our capital is $300,000 and our sur- 
plus is about $7,000,000. 

Mr. Warner: Your stock is worth about $4,300 a 

Mr. Williams: Yes, sir; it sells for that. It sells for 
more than it is worth. 

Mr. Warner: Forty-three times as much as its par. 
What is the amount of your bond deposit? 

Mr. Williams : The Chemical Bank has never taken 
out any circiilation whatever. Our bond deposit is 
$50,000; but we have never circulated any notes. 


The Chairman pursued this line of questioning, and 
elicited the following admissions: — 

The Chairman : Mr. Williams, some members of the 
committee desire to understand exactly the condition 
of your bank. What did you state the capital was? 

Mr. Williams: Three hundred thousand dollars. 

The Chairman: And the surplus? 

Mr. Williams: The surplus and undivided profits 
are about $7,000,000. The surplus is $6,000,000 and 
the undivided profits a little over a million dollars, 
making a little over $7,000,000 of surplus and undi- 
vided profits. 

The Chairman: And how much deposits? 

Mr. Williams : Thirty million dollars. 

The Chairman: What dividend do you pay per 
annum on your stock? 

Mr. Williams: We pay now 150 per cent, per annum. 

The astonishing annual profits of that bank is shown 
by the following: — 

The Chairman : You stated the dividend last year 
was 150 per cent. 

Mr. Williams: Yes, sir. 

The Chairman: What were the undivided profits of 
that year? 

Mr. Williams: Well, I have not it in mind; but 
owing to the panic our profits last year were not as 
large as usual. Usually we expect to add to our sur- 
plus 100 per cent, besides the dividend we pay of 150 
per cent. 

The Chairman: That is $300,000 a year? 

Mr. Williams: Yes, sir. 

The Chairman: And a dividend of 150 per cent be- 

Mr. Williams: Yes, sir. 

In the year of the panic of 1893, this institution gath- 
ered in a profit of 250 per cent. 

A partial list of other banks of New York City is 
appended, to illustrate their unheard-of profits : — 


The par value of the stock of the Mechanics' National 
Bank is $25 per share; it is now worth $195 per share. 

The par value of the stock of the Importers' and 
Traders' National Bank is now worth $500 per share. 

The par value of the stock of the Hanover National 
Bank is $100 per share; it is now worth $340 per share. 

The par value of the stock of the Gallatin National 
Bank is $50 per share; it is now worth $300 per share. 

The par value of the stock of the Broadway National 
Bank is $25 per share; it is now worth $250 per share. 

The par value of the stock of the Chatham National 
Bank is $25 per share; it is now worth $300 per share. 

The par value of the stock of the City National Bank 
is $100 per share; it is now worth $600 per share. 

The par value of the stock of the Corn Exchange 
National Bank is $100 per share; it is now worth $300 
per share. 

The par value of the stock of the Fifth Avenue Na- 
tional Bank is $100 per share; it is now worth $3,000 
per share. 

The par value of the stock of the Chase National 
Bank is $100 per share ; it is now worth $500 per share. 

The par value of the stock of the Fourth National 
Bank is $100 per share; it is now worth $185 per 

The difference between the face, or par value, of the 
stocks of these banks, and the market value thereof, 
results from the surplus and undivided profits, which 
are accumulated after the payment of large periodical 
dividends to the stockholders. 

Not satisfied with these unparalleled incomes, these 
national banks, in connection with others of New 
York City, constitute that Clearing House, which per- 
sistently claimed the special bounties of the Govern- 
ment in the way of tens of millions of prepaid interest, 
premiums on bonds, and gratuitous loans of public 
money, aggregating hundreds of millions of dollars. 


The money kings at the head of these banks are the 
most persistent and greatest beggars on earth. 

They are the financiers who have brought on every 
panic since 1865, and, from the tumbling of stocks and 
wreckage of fortunes, gather in the wealth of the 

In 1896, the great trust companies of that city held 
deposits of money aggregating $242,000,000; and paid 
dividends of 25 to 40 per cent, to their stockholders. 

They were as strong in 1893. 

These trust companies are the holders of hundreds 
of millions of dollars in bonds of railway, street rail- 
way, gas, and electrical companies, located chiefly in 
the West and South. The income from these stocks 
and bonds accelerates the flow of money to the East. 

Many of these corporations, whose stocks are so held 
by the capitalists of New York City, are bonded from 
two to five times their actual value, thus operating as 
a heavy burden upon those commtinities who have 
granted these corporations valuable franchises. A 
single street railway corporation in one of the Western 
States was purchased by two Eastern speculators for 
$2,000,000; they at once proceeded to issue bonds 
upon this property to the amount of $4,000,000, which 
they sold to a trust company in New York City. 
They also issued stock to the amount of $4,500,000, 
which was disposed of by these scoundrels, making a 
total debt of $8,500,000 upon a property costing but 
$2,000,000. The people of that city pay the interest 
upon these bonds, and the dividends upon this stock, 
by submitting to exorbitant charges. 
. This money power, with the eyes of Argus and the 


hands of Briareus, has likewise seized upon the natural 
gas resources of the West. 

A syndicate of Eastern capitalists purchased the 
natural gas properties in the State of Indiana, the total 
outlay in cash being $3,500,000. It immediately pro- 
ceeded to issue bonds thereon to the amount of $8,250,- 
000, which were sold to a trust company in New York 
City. The proceeds of these bonds paid for the entire 
investment besides yielding a surplus or bonus of $2,- 
600,000. In addition, stocks were issued on this prop- 
erty to the amount of $8,900,000. The interest and 
dividends on these stocks and bonds are squeezed 
out of the people of that State, and the money 
goes to increase the hoards of the millionaires of the 

The same is true of the stock-yards of the West. A 
single stock-yard company of Kansas City is enor- 
mously over-capitalized. In order to make the divi- 
dends to transmit to the Eastern stockholders, corn was 
bought at ten cents per bushel, and sold at one dollar 
per bushel to those who are compelled to feed their 
stock shipped through those yards. Such is the rob- 
bery practiced on the West by what is called the culture 
and sound finance of the East. 

The more than one hundred thousand miles of rail- 
ways traversing the West and South, cost, on an aver- 
tage, $20,000 per mile for their construction. The 
average bonded indebtedness is $63,000 per mile, and 
the interest on these bonds is met by extortionate 
rates of transportation acting as a means of levying 
heavy tribute upon the agricultural products of these 
sections. These bonds are chiefly held in New York 
City and England. 

The iniquity of this system can be faintly understood, 


when it is borne in mind, that many of these railways 
were originally built by immense contributions of 
money and land by cities, townships, counties, and 
States, through which they run, in addition to the enor- 
mous land grants bestowed upon these corporations 
by the general Government, the last of which aggre- 
gated more than two hundred million acres of valu- 
able public lands. 

The wealth of the insurance companies is almost in- 
calculable. There are single life insurance companies 
in that city, whose resources equal that of sovereign 
States. Three of these corporations have assets 
exceeding $600,000,000. The agents of those com- 
panies are planted over all the entire West and South, 
and^he periodical flow of money to the East rivals the 
revenue of nations. This volume of money takes its 
origin from nearly every farm house, hamlet, village, 
town, and city in the Union, converges at the general 
agencies, and thence pours a mighty flood of dollars 
into the treasuries of the home companies. 

From 1869 to 1889, a period of twenty years, the 
State of Illinois contributed $138,425,433 to the various 
insurance companies of the East. It received back, 
in the way of losses paid, only $84,929,204, leaving a 
surplus or profit over expenditures of $53,496,229. 
This drain was from a single State. 

The aggregate from the West and South in the last 
twenty years would reach billions. 

These insurance companies, in turn, loaned this 
money to the South and West at exorbitant rates of 
interest, resulting in an additional drain on those sec- 

Then there are the loan and mortgage companies of 


New York City and the East who make a specialty of 
loaning money on the farm lands of the West and 

The holdings of these companies aggregate more 
than one billion dollars; and the annual flow of money 
to the East for interest charges is at least $150,000,000. 

In speaking of the astonishing increase of the mort- 
gage debt of the West, Frederic C. Waite said : — 

*'The most astonishing increase of all, however, is 
in the real estate mortgage indebtedness, as disclosed 
by the investigations of the eleventh census. Let us 
remember that this is largely the debt of the hardest 
working and the poorest paid of all our American citi- 
zens, namely, the farmers and the laborers who are 
trying to obtain a home of their own by honest toil. In 
the twenty-one States for which the mortgage indebt- 
edness has been tabulated, the aggregate amount in 
force, at the close of 1889, was four thousand five 
hundred and forty-seven millions with the great States 
of Ohio, Texas, and California, and whole groups of 
lesser States yet to be heard from. The grand aggre- 
gate will be no less than six thousand three hundred 
millions. The aggregate in 1880 was only about two 
thousand five hundred millions. ' ' 

The number of these loan and mortgage companies 
is very great, not only in New York City, but in other 
Eastern cities. 

In an article upon this subject, the Political Science 
Quarterly, for September, 1889, said: — 

''Boston numbers more than fifty agencies of farm- 
mortgage companies. It is computed that Phila- 
delphia alone negotiates yearly more than §15,000,000 
on Western loans. Kansas and Nebraska have one 
hundred and thirty-four incorporated mortgage com- 
panies. The companies organized under the laws of 
other States but operating in these two States increase 
the number at least two hundred. 



"In this reckoning, no account is taken of firms and 
individuals, although a large amount of money is 
directly invested by lenders of this class. ' ' 

The financial resources of Boston are a mere baga- 
telle, when compared with those of New York City, 
yet the former has more than fifty of these loan and 
mortgage companies. 

The Forum, for March, 1890, makes the following 
astonishing statement : — 

"It is impossible to say how much has been invested 
in the West in real estate securities, but the amount is 
enormous. Five mortgage companies at Topeka, 
Kans. , report that the loans made by them, and still out- 
standing, amount to $22,000,000. Of this sum 90 per 
cent, has been invested in Kansas. Five companies at 
Kansas City, report $68,000,000 outstanding. This 
amount has been placed in a dozen Western States." 

This remarkable state of affairs in the West and 
South will be considered strange, in view of the facts 
that these sections are the food- producing regions of 
the country, and, that while they feed this whole nation, 
they furnish more than three fourths of the exports 
which maintain a balance of trade in favor of the United 

The high-handed and oppressive manner, in which 
these loan agencies and companies have invoked the 
law to foreclose their mortgages on the farms of the 
West, is a scandalous abuse of power. 

As the improved farms were only pledged for the 
payment of a sum of money never exceeding in any 
case more than fifty per centum of the value of the 
naked land, the securit)'- was good. 

Nevertheless, many thousands of suits for foreclosure 
were instituted on the slightest failure to pay the inter- 


est coupons ; decrees of sale were accordingly entered, 
and the land sold to pay the debt, whereupon these 
mortgagers would bid in the entire mortgaged premises 
for a fraction of the claim, obtain the property for a 
mere nominal sum, and yet hold a large residue of the 
judgment over the head of the unfortunate debtor to 
seize what other property the mortgagor would happen 
to possess, and thus sweep away all into the coffers of 
these voracious usurers. 

This iniquitous use of the process of the law to rob 
the debtors of the West and South of their whole sub- 
stance, is a dark and damnable blot on the jurispru- 
dence of the United States, and it would shame the 
hardened nature of a Bashi Bazouk. 

The future historian will marvel at the patience dis- 
played by these people under the circumstances. 

Closely allied to the moneyed corporations of New 
York City, and having an unity of interest with them, 
are the 3, 700 other national banks scattered over the 

An examination of the list of officers and directors 
of the national banks of New York City, Boston, 
Hartford, New Haven, Providence, Philadelphia, 
Brooklyn, Baltimore, Chicago, and other leading cities, 
reveals some marvelous facts. 

It will demonstrate that the presidents and directors 
of the national banks of the first-named city, control the 
operations of the loan and trust companies, the gigantic 
life insurance corporations, the sugar trust, and the 
Stock Exchange. 

These financial magnates are heavy stockholders in 
what are called natural monopolies, such as street rail- 
way companies, and corporations which furnish water 
and light for the cities of the nation. 


H. O. Havemeyer, the sugar f rust king, is the heav- 
iest stockholder in the Western National Bank. Rus- 
sell Sage, the great stock speculator of New York City, 
is the chief owner of the Importers' and Traders' 
National Bank. And so the list could be indefinitely 
extended, showing that the great stock gamblers of 
Wall street, the organizers and managers of oppressive 
trusts, the wreckers of railroads, the heads of great 
insurance companies, the merchant princes, the highly 
protected manufacturing lords, the owners of great 
newspapers, are the individuals at the head of the 
national banking money power. 

In the city of Chicago, all the members of the great 
packing house and stock -yard trust are heavily inter- 
ested as owners and directors of national banks. Its 
millionaire merchants, grain gamblers, owners of street 
railway stocks, and gas properties, dictate the election 
of officers of these banks. 

As another means of securing control of the entire 
volume of money, the national bank managers, with 
wonderful prescience, organized trust companies in 
every great city of the country to act in the capacity 
of receivers, trustees, executors, administrators, and 
guardians, with the intention of monopolizing the pro- 
bate business of the courts. 

Proof of the strongest nature can be produced, to 
show that these national banks have loaned money to 
flourishing manufacturing enterprises, then, at an 
opportune moment, forced their debtors into bank- 
ruptcy, had their trust companies appointed receivers 
of the trust estate, charged enormous fees for settling 
up the affairs of the bankrupts, while the officers of 
these banks, as private individuals, bought in the 
assets of these unfortunates at a great sacrifice. 


It is said of a national bank president, who is also 
at the head of one of these trust companies, that he 
keeps himself thoroughly versed in the financial con- 
dition of the debtors of his and other banks, that he 
carefully watches the growth of the business of these 
debtors until they become ripe for plucking, and that, 
as a bon-vivant examines a fowl to ascertain its condi- 
tion, so this great financier waits for his victim until 
he reaches that stage that he can be thrown into bank- 
ruptcy, when he pounces on him as the vulture pounces 
on its helpless prey. The receivership of his trust 
company does the rest. 

Up to the early part of 1893, this money power had 
built up a system of bank credit that was stupendous 
in its proportions. 

Under its manipulations of the volume of money it 
had forced nearly all business on a bank-borrowing 

In a report of the Comptroller of the Currency for 
1893, the loanable funds of all the banks of the United 
States, on the 30th day of June of that year, aggre- 
gated $6,412,939^954. 

It may seem a mystery to many how it can be pos- 
sible, that, with a volume of money of but $1,600, - 
000,000 in the nation, these banks have a loanable fund 
of four times that amount. 

The process, or legerdemain, by which these finan- 
cial institutions expand $1,600,000,000 of actual money 
to $6,412,939,954 of loanable bank credits, and exact 
the highest rate of interest on the latter is a matter 
which has confounded many students of finance. 

The process of the banks, in building up this colossal 
system of credit, and subordinating the immense inter- 


ests of the country to their dictation, is ver>^ simple. 
The loanable funds of the banks consists of their paid- 
up cash capital, deposits, and their loans to customers. 

This expansion of the loanable funds of a bank can 
be most clearly explained by the example of the First 
National Bank of Chicago, of which Lyman J, Gage 
was President, previous to his appointment to the Sec- 
retaryship of the Treasury. 

This bank has a capital of $3,000,000, loans and dis- 
counts of $17,723,727, and total assets of $39,500,000, 
The query arises — how can a bank with but $3,000,000 
capital loan nearly $18,000,000 and have assets of 
nearly $40,000,000? 

It makes these loans out of the money daily deposited 
with it, or, more clearly speaking, on what it owes to 
others. It not only controls its own money, but the 
money of the business community in which it is sit- 

To further illustrate the methods of banks in swell- 
ing the amount of loanable funds, and consequently 
their power to reap interest therefrom, take the follow- 
ing case: A merchant goes to one of these great 
banks, and his credit being first class, he boirows $300,- 
000 on thirty, sixty, or ninety days' time. The inter- 
est is deducted out of the loan in advance, and the 
balance credited to the borrower, who does not take 
this money out of the bank to his place of business. 
This borrowed money remains with the bank for the 
payment of checks drawn against it by the merchant. 
Owing to this process, the bank, while making a profit 
out of the loan, still has the use of the money out of 
which to make additional loans, and so this process 
goes on indefinitely. 


The supply of money in the bank for the payment of 
checks and drafts is maintained by the daily deposits 
of its hosts of customers. 

This is the identical process by which the system of 
banks have expanded $1,600,000,000 to $6,400,000,000 
of loanable interest- bearing bank credits. 

This loanable bank credit means an annual income 
of at least $400,000,000 to these institutions. 

This is a substantial reason why the system of 
banks, throughout the length and breadth of the land, 
eulogize credit, and why they are opposed to a suf- 
ficient volume of money, and why exalt credit above 
actual cash. 

This vast income of the banks operates as a tax upon 
the people — a tax which ultimately falls with crushing 
weight upon the laboring man. 

The wholesale merchant borrows a large sum of 
money from one of these great banks at the prevailing 
rate of interest which is deducted in advance. He 
adds this payment of interest to the cost of the goods, 
and charges a profit upon the whole amount thus 
invested. The retailer buys these goods with the inter- 
est charge and the profit mingled with the price. In 
many cases, he borrows the money unde::, the same 
process as the wholesale merchant, and he adds the 
interest charge to the cost of the goods so purchased, 
and thus he extracts a profit upon his goods from the 
ultimate purchaser, who is the consumer of them. 

Therefore, these enormous profits of the credit sys- 
tem of the banks levy tribute upon every article neces- 
sary for the sustenance and comfort of life. 

In this connection, let it be borne in mind that the 
sole class upon whom rests the enormous burdens of 


government, and from whom has been extorted those 
almost incomprehensible sums of money that found 
their way into the coffers of the bankers and bond- 
holders, is the producers of wealth. 

The creation of wealth arises in three ways ; viz. , 
transmutation, transformation, and transportation. 

The man who plows, sows, and reaps, is engaged in 
the first-named process ; the mechanic, or laborer, who 
adds value to the raw material, is an example of the 
second ; the distribution of the products of the agri- 
culturist, and the skilled or unskilled workman, falls 
in the province of the last named. 

These processes are the sole means of adding to the 
stock of material wealth. 

Bankers, merchants, and those belonging to what 
are called the learned professions, do not add a single 
penny to a nation's stock of wealth. 

The banker and the money lender merely gathers 
toll from those who borrow the medium of exchange 
to carry on business. 

The merchant of every description who obtains a 
profit on the merchandise he buys and sells, merely 
takes the difference between the cost and selling price 
of goods from the customers, and adds it to his own 
possessions. This process does not add a farthing to 
the wealth of the nation as a whole. 

Lawyers, physicians, and all other members of the 
professions, only absorb what is produced by others. 

There is no way under heaven by which these classes 
of persons add anything to the wealth of a people. 

All township, municipal, county. State, and Fed- 
eral officers, are merely consumers of what is produced 
by those who are engaged in the processes of trans- 
mutation, transformation, and transportation. 


Every tax levied and collected by the Government, 
and its various political and territorial subdivisions, is 
a transference of wealth from the people, to be in 
turn, given to those who are the official organs of law- 
ful authority. 

These definitions of the producing and non-produc- 
ing classes are matters of every-day observation, and 
are susceptible of complete demonstration. 

It is upon the shoulders of the producing class 
that rest the crushing weight of government, the 
enormous gains of national banks, and other wealth- 
consuming elements. 

These burdens are surely bearing down the people 
into a bottomless abyss of bankruptcy. 

One of the means that greatly increased the power 
of the national banks of New York City, was their 
selection as depositories of government funds during 
the last thirty years. 

In a speech of Comptroller Eckles, at a banquet 
given in his honor by these banks, he thus extols these 
pets of the Government. He said : — 

"As government depositories the national banks 
have received, stored in their vaults, and accounted 
for $5,356,625,891 without expense to the Govern- 
ment. Allowing the rate of three eighths of one per 
cent, as a reasonable compensation for such services, 
which is the same as that fixed by the act of March 3, 
1875, 3-s the compensation of disbursing officers for 
public buildings, it would amount to $20,087,347." 

Think of it ! These few banks had the use of more 
than five billions of government money, increasing 
their loanable funds to that extent, and from which 
they gathered scores of millions of profit. 

Through the agency of the railway and the tele- 


graph, the national banking money power of to-day 
can reach every part of the United States in twenty- 
four hours. The national banks know the value of 
organization, and they have brought it to a perfection 
that would excite the admiration of a Napoleon. 

Shortly after the inauguration of President Cleve- 
land, the national banks of New York City transmitted 
the following infamous circular to the thousands of 
banks scattered throughout the United States. The 
contents of the circular- are as follows : — 

' ' Dear Sir : The interests of national bankers require 
immediate financial legislation by Congress. Silver, 
silver certificates and treasury notes, must be retired 
and national bank notes upon a gold basis made the 
only money. This will require the authorization of 
from $500,000,000 to $1,000,000,000 of new bonds as a 
basis of circulation. You will at once retire one third 
of your circulation and call in one half of your loans. 
Be careful to make a money stringency felt among your 
patrons, especially among influential business men. 
Advocate an extra session of Congress for the repeal 
of the purchasing clause of the Sherman law and act 
with the other banks of your city in securing a large 
petition to Congress for its unconditional repeal, per 
accompanying form. Use personal influence with 
congressmen and practically let your wishes be known 
to your Senators. The future life of national banks 
as fixed and safe investments depends upon immediate 
action, as there is an increasing sentiment in favor of 
Government legal tender notes and silver coinage." 

While the national banks of that city were engaged 
in this conspiracy to wreck the business interests of the 
country, they were raiding the gold reserve of the 
United States Treasury to force an issue of bonds. 

Coincident with the appearance of this circular, 
which advised the bringing on of this panic, the fol- 


lowing remarkable document was put forth by the 
national banking money power. It is as follows : — 

"Dear Sir: The present financial situation requires 
the following action by Congress, which should be fav- 
ored by all interests, to wit : — 

**i. Pass a resolution repealing purchase clauses of 
Sherman silver bill. 

*'2. Pass a bill authorizing the issue of $300,000,000 
of United States 3 per cent, bonds, payable in gold, 
directing United States Treasurer to sell $100,000,000 
immediately in Europe, with stipulation that none of 
them should be resold within the United States; the 
Treasurer to take this $100,000,000 of gold and issue 
$100,000,000 of gold certificates against it, and deposit 
them in the different national banks of the United 
States pro rata to their capital and circulation, upon 
adequate security being given to the Government secur- 
ing such deposits ; such deposits to be preferred liens 
upon all assets of each bank, etc. 

"It should also direct the Treasurer to sell $100,- 
000,000 of such bonds immediately in Europe under 
similar conditions, the money to be placed in the 
United States Treasury or left on deposit in London, 
Paris, and Berlin, for use by the Government in paying 
deficiencies between the Government's receipts and 
expenditures, and drawn as needed. 

"The remaining $100,000,000 should be held subject 
to sale whenever the necessities of the Government or 
the financial interests of the country demand it. 

"Bringing $200,000,000 of gold to this country, in 
addition to the balances of trade in our favor, would 
immediately establish confidence in our financial 

"3. Pass a resolution calling an international confer- 
ence to establish an international agreement as to the 
use of silver as currency, to be held within twenty 
days after the passage of such resolution. Twenty 
days' notice by cable is amply sufficient to allow time for 
every govenment to appoint men who understand the 


subject thoroughly, and have them meet at some con- 
venient place. 

'* The delegates representing the United States 
should be selected by Congress and named in the reso- 
lution, two of them to be Senators from the silver 
States and two of them equally representative of the 
other side of the question. 

"4. Pass the act increasing national bank circulation 
to par of deposited bonds. 

*'The above legislation would immediately inspire 
confidence here and abroad in American finances and 
start again the wheels of business, now helplessly 

* ' For the future the following action should be taken : 

*'5. Pass a resolution appointing a committee, to 
consist of five New York bankers of the highest stand- 
ing and one each from Boston, Philadelphia, Chicago, 
St. Louis, Cincinnati, Nashville, Atlanta, Savannah, 
New Orleans, Galveston, San Francisco, Denver, St. 
Paul, Detroit, Buffalo, and Pittsburg, this committee 
to immediately meet, consider, and report to an ad- 
journed session of Congress a' bill incorporating . a 
United States national bank, founded on the same 
lines as the national bank of England and the national 
bank of France, to be entirely divorced and free from 
politics ; and it being expressly stipulated that one half 
of the committee shall be selected from. Republican 
bankers and one half from Democratic bankers. 

''A national bank is absolutely necessary for the 
future financial safety of the country. ^ Under present 
conditions there is no elasticity to our currency. 

"Five per cent, of our financial business is done 
with cash, 95 per cent, with credit. 

"To-day credit is largely destroyed, which leaves us 
trying to do more than one half of the business of the 
country on the insignificant 5 per cent, cash, and a 
considerable proportion of this cash hoarded and taken 
out of circulation. 

*'To meet emergencies like this, we should have a 


national bank, having power to make almost an un- 
limited issue of currency, with the same power and 
self-interest, when confidence returns, to take and 
return all this , specially-issued currency and retire it 

"The bank of England and the bank of France have 
power to issue millions upon millions of additional 
currency whenever necessary to protect and conduct 
the finances of the country, and they exercise this 
power, and therefore such extreme panics as ours are 
unknown in those countries. When the crisis is over, 
this extra currency is retired. 

"There is no question as to the safety of this power; 
it has been exercised by these great banks in 
these two countries for generations, and has been their 
financial salvation, and we can have no permanent 
financial safety in the United States until we create a 
similar national bank or else make the United States 
Treasury a bank and authorize and direct that in times 
of panic and destruction of credit the Government 
shall issue currency to an extent necessary to meet the 
emergency, and deposit it in the national banks of the 
country. Of the two measures, it is certainly prefer- 
able to have a great national bank, founded on almost 
exactly the lines of the Bank of England, thus taking 
financial questions and management entirely out of the 
influence of politics, because the government of the 
great National Bank of England is entirely in the 
hands of the greatest business men of the countr>% 
who have no interest whatever in politics, except as 
citizens. Yours trulv, 

Wm. R. Conway." 

This document was placed in the hands of members 
of Congress with a view of influencing their action. 
The first demand, couched in this circular, requested 
Congress to repeal the purchase clause of the Sherman 
law. The second demanded the passage of a bill auth- 
orizing the issue of $300,000,000 of United States bonds, 
payable in gold, and $ioo,ooo,oooof gold thus received. 


and for which interest was to be paid by the nation, 
should be given to the different national banks as a 
loanable fund. 

The third demands the repetition of that farce — the 
calling of an international monetary conference. The 
fourth — the passage of an act permitting national 
banks to increase their circulation up to the par value 
of the bonds deposited by them. 

Fifth, The passage of a resolution authorizing a com- 
mittee of bankers to frame a bill incorporating a na- 
tional bank, operating on the same principles as the 
Bank of England. This proposed bank to be endowed 
with the power of making an unlimited issue of cur- 
rency, the volume of which could be contracted when- 
ever the self-interest of the banks saw fit to curtail this 
volume of money. 

Thus the Tory- Eastern system of finance was out- 
lined by the money power. The historical incident of 
Didius Julianus bidding-in the Roman Empire, that 
he might absorb its entire revenues for his personal 
benefit, was not a circumstance compared to the mon- 
umental greed of the national banking money power. 

Subsequent history has fully demonstrated that sev- 
eral of the demands set forth in this circular have 
found their way upon the statute-books of this nation, 
and that the remaining are gradually taking the form 
of proposed legislation. 

This great scheme of building up a mighty system of 
bank credit would place seventy millions of Americans 
at the mercy of the money mongers of London and 
New York City. 

This bank credit system, embodied in the national 
bank plan, has its center in London, and this would 


be true of any system of bank currency, no matter how 
carefully framed. 

This was the case with the United States bank, and 
it applies more emphatically to the present system. 

In a great speech on the banking question, Thomas 
H. Benton, more than fifty years ago, so clearly, log- 
ically, and powerfully traced this bank credit currency 
system to its source that it merits careful reading. He 
said : — 

"The banks at that center to which currency flows, 
hold the power of controlling those in regions whence 
it comes, while the latter possess no means of restrain- 
ing them ; so that the value of individual property, and 
the prosperity of trade, through the whole interior of 
country, are made to depend on the good or bad man- 
agement of the banking institutions in the great seats 
of trade on the seaboard. 

"But this chain of dependence does not stop here. 
It does not terminate at Philadelphia or New York. 
It reaches across the ocean, and ends in London, the 
center of the credit system. The same laws of trade, 
which give to the banks in our principal cities power 
over the whole banking system of the United States, 
subject to the former, in their turn, to the money 
power in Great Britain. 

"It is not denied that the suspension of the New 
York banks in 1837, which was followed in quick suc- 
cession throughout the Union, was partly produced by 
an application of that power ; and it is now alleged, in 
extenuation of the present condition of so large a por- 
tion that their embarrassments have arisen from the 
same cause. From this influence they cannot now 
entirely escape, for it has its origin in the credit cur- 
rencies of the two countries ; it is strengthened by the 
current of trade and exchange, which centers in Lon- 
don, and is rendered almost irresistible by the large 
debts contracted there by our merchants, our banks, 
and our States. 


* ' It is thus that the introduction of a new Dank into 
the most distant of our villag-es, places the business of 
that village within the influence of the money power of 
England. It is thus that every new debt which we con- 
tract in that country seriously affects our own currency 
and extends over the pursuits of our citizens its power- 
ful influence. We cannot escape from this by making 
new banks, great or small, state or national. The 
same chains which bind those now existing to the center 
of this system of paper credit, must equally fetter 
every similar institution we create. It is only by the 
extent to which this system has been pushed of late, 
that we have been made fully aware of its irresistible 
tendency to subject our own banks and currency to a 
vast controlling power in a foreign land ; and it adds 
a new argument to those which illustrate their preca- 
rious situation. Endangered in the first place by their 
own mismanagement, and again by the conduct of 
every institution which connects them with the center 
of trade in our own country, they are yet subjected, 
beyond all this, to the effect of whatever measures, 
policy, necessity, or caprice, may induce those who 
control the credits of England to resort to. * ' 

This great statesman, who so ably exposed the dan- 
gers of a bank currency which would degrade the 
United States into a mere dependency of the ' ' Little 
Isle beyond the seas, ' ' has long since passed away, but 
his solemn warning still beckons to the people, and 
points out the folly of trusting themselves to the em- 
brace of that boa constrictor — the banking monopoly. 

In the month of April, 1893, the New York bankers 
had a conference with Secretary Carlisle at Washing- 
ton, in which they demanded that he issue bonds to the 
amount of $150,000,000. Secretary Carlisle would not 
accede to their demands at this time. 

The refusal of Mr. Carlisle to grant the demands of 
these bankers angered them, and they returned to 


New York City determined to force an issue of bonds 
at all hazards. 

They continued to raid the gold reserve more 
fiercely than ever. 

In the meanwhile, with a few honorable exceptions, 
the banks throughout the country executed the man- 
dates couched in that circular issued from New York 

Loans were refused, and outstanding obligations were 
remorselessly called in by these tools of the money 
kings. As an excuse for that conduct, it was asserted 
that "confidence" was lost. 

The press of New York City, with few exceptions, 
owned body and soul by the national banking money 
power, aided in the work by its senseless clamor. 

It called attention to every shipment of gold that 
went out of the country as a fearful calamity. 

One of these newspapers daily printed in large 
figures on its front page the low state of the gold 
reserve. They denounced the silver dollar as a "50- 
cent dollar," a "dishonest dollar," a "fiat dollar." 

In short, the vocabulary of abuse was exhausted by 
them when speaking of silver as money. 

The Sherman silver law was pointed to as the whole 
cause of the panic now raging. 

The mercenary character of the New York press, 
and its ownership by foreign capitalists and the national 
banking money power, is best illustrated by that vet- 
eran journalist, Colonel Cockerill. He says : — 

"The fashion of editing the more influential or the 
more successful daily newspapers by cablegram has 
completely destroyed what little virility was left in 
their editorial pages. 


"The non-resident ownership of newspapers leads to 
one serious result, which, I think, has not been gen- 
erally considered. 

"The owner receives from his newspaper property, 
at stated intervals, returns in money. He is beyond 
the reach of proofs. 

"The address of his banker is always known. 
Thither, on the first of every month, large sums of 
money must be forwarded. 

"The tendency of non-resident ownership must, 
therefore, necessarily be to measure everything by a 
pecuniary test. The morale of the paper, its course 
of public measures, and its treatment of the interests 
of the people, whose trustee it professes to be, with 
such protestations, are considered only from the point 
of view of the counting room. 

"The worst phase of non-resident ownership is its 
absolute heartlessness. ' ' 

Such is the stinging indictment brought against these 
great journals by this able writer. 

In speaking of the tyranny of that press, W. P. St. 
John, President of the Mercantile National Bank, an 
advocate of free coinage of silver, said : — 

"There is a very widespread unrest of opinion on 
this topic and the allied topic, called the 'silver ques- 
tion,' even in New York and New England. Public 
opinion is under a newspaper terrorism in New York. 
Men who agree with me fully, and I know many of 
them of considerable wealth, prefer to keep silent for 
the present. Any nobody who will write at length a 
lot of nothingness adverse to silver money will be 
accorded certain newspapers' space and be dignified into 
great authorities. Rejoinder, if complete, and the 
more complete the more certainly,' is denied even a 
limited space. Again, other men believe that until a 
change of administration here approaches it will merely 
cost them influence to speak their conclusions favorable 
to silver money. Then, too, certain newspapers shield 


their readers against intelligence and cow them out of 
any timid convictions they might indulge." 

He added: — 

"But conditions current here and elsewhere are forc- 
ing the truth upon general attention, and a rebellion 
against this tyranny and concealment of facts will 
manifest itself ere long in New York as elsewhere. I 
have recently been urged by commercial bodies of two 
important Eastern cities to address them at length 
upon my convictions. I declined on the ground that I 
have talked so much that I deem it unwise to be heard 
again on the topic until invited to speak by my im- 
mediate associates in the city of New York. 

"The paper that I now ask the privilege of reading, 
was prepared for a monthly magazine of importance. 
I asked the space at first, but afterward withdrew the 
request. The editor urged my canying out my first 
intention. His private secretary heard the matter in 
the rough and urged me the more to complete it for 
his magazine. I learn this morning that more accept- 
able matter will crowd me out, which is only another 
evidence of what you gentlemen, aiming to serve your 
country, are entitled to complain of in the Eastern 
press. ' ' 

Among all the bankers of that city, Mr. St. John 
was the sole financier who urged the adoption of free 
coinage, and a continuance of the greenbacks and 
treasury notes as a part of the volume of money. 

His example was a green oasis amidst the barren 
desert of avarice of the national banking element. 

The press still continued this warfare upon silver, 
greenbacks, and the treasury notes; and editorially 
endorsed the course of the bankers in creating a mone- 
tary stringency. 

In urging a repeal of the Sherman law, the Com- 
mercial Bulletin said : — 


' ' The quickest if not the only way to repeal the Sil- 
ver Purchase law is to precipitate a panic upon the 
country as nothing short of this will convince the silver 
men of their error, and arouse public opinion to a 
point which will compel the next Congress to repeal 
the Sherman law whether it wants to or not. ' ' 

The New York Sun April 29, 1893, exposed this 
scheme of the New York banks, and charged that they 
sent abroad $1 10, 000, 000 of gold to assist the Rothchilds 
to demonetize silver in Austria and elsewhere. It 
said : — 

**Let us point to another fact, and we are done. 
Never before have the large banking institutions of 
Chicago and the West ordered their gold in such large 
quantities direct from Europe, and in this fact is found 
one reason why our bankers are puzzled over the anom- 
aly that, although all these millions are coming to the 
country, they experience little or no relief therefrom. 
The other reason, gentlemen, is, in order to force the 
repeal of the Sherman Act and to quickly establish your 
power over the plain people of this land, you first sent 
out of the country one hundred and ten millions of the 
people's currency in order to assist the Rothchilds to 
demonetize silver in Austria and elsewhere, and then 
let it remain there, to teach the West and South an 
'object-lesson,* as the President called it, until you 
found it was necessary to recall it in order to save your 
own house from destruction. Now, you have not only 
taught the West and South an object-lesson, but your- 
selves one as well, and you can be sure of it. ' ' 

The Sun is an advocate of a single standard of gold, 
but the scoundrelism of the New York banks aroused 
its indignation. 

Meanwhile, President Cleveland was hand in glove 
with the treasonable banks, as the following from the 
New York Sun fully proves. 

It said April 28, 1893: — 


''Secretary Carlisle decided yesterday morning to 
have a talk with the New York bankers. Late on 
Wednesday evening after his arrival from Washington, 
he conferred with Assistant Treasurer Jordan, and 
ex-Assistant Treasurer James J. Canda. As a result 
the Secretary yesterday morning suggested that he 
meet the bank presidents and private bankers at four 
o'clock in the afternoon. The postponement in the 
naval review because of the storm caused some delay, 
as Secretary Carlisle accompanied President Cleveland 
on the Dolphin. 

' ' The vSecretary landed with the Presidential party 
at the foot of Ninety-sixth street, and was there met 
by the Columbian reception committee, including 
President J. Edward Simmons, of the Fourth National 

' ' The Secretary and Mr. Simmons were driven to the 
home of President George G. Williams, of the Chem- 
ical Bank, and chairman of the Clearing House Associ- 
ation, at 34 West Fifty-eighth street. 

"The following gentlemen were there to greet the 
Secretary: Mr. Jordan, Mr. Canda, President Perkins, 
of the Importers' and Traders' ; President Sherman, of 
the Bank of Commerce; President Cannon, of the 
Chase ; President Ives, of the Western ; President Gal- 
latin; President Coe, of the American Exchange, and 
President Woodward, of the Hanover, all national 
banks. The conference between the Secretary and the 
bank presidents lasted somewhat over an hour. There 
was the utmost good feeling displayed, and the Secre- 
tary said that he was there to make a free, frank, and 
open statement of what he believed to be the financial 
policy of the Government. 

"In the first place, the Secretary said that an issue 
of bonds just at this time might be an effective remedy, 
but it would only be temporary, and that it would be 
followed by disturbances in the money market, and 
would in the end retard the determination of the ad- 
ministration to repeal the Sherman silver law. The 
Secretary said positively that there would be no bond 


issue except as a last resort. As the Secretary outlined 
the policy of the Government, it was that nothing 
would be done that in any way would retard or check 
the determination of the Cleveland administration con- 
cerning the repeal of the Sherman law. The Secre- 
tary went over the currency laws of the country, and 
said they were in bad shape and needed revision. He 
said the revision should start with the Sherman law. 
There is a determination also to show to the miners 
of silver the evil effects of the Sherman law on their 
own fortunes. 

"President Cleveland's advisers have told him that 
the only way to induce the Western and Southwestern 
Senators and Congressmen to consent to a repeal of 
the Sherman law is to demonstrate to their constitu- 
ents that they are losing money every day that this law 
is in operation. The missionary work in that direction 
has been started by a number of the bankers in the 
solid communities of the East. They are daily refus- 
ing credits to the South, Southwest, and West, fearing 
the effects of the Sherman law. 

*'The Chicago bankers, it was said, are carrying out 
the same line of policy. Secretary Carlisle, in his 
talk with the bank presidents, made his stand very 
clear. It is to be heroic treatment all the way through 
on the Sherman law ; and possibly by the next session 
of Congress, the silver mine owners and the adherents 
of silver in the Senate and the House will be ready to 
consent to a repeal of the law. 

"The bank presidents, replying to Secretary Carlisle, 
cordially informed him that they would be ready at all 
times to co-operate with him in the successful admin- 
istration of the financial policy of the administration. 
Everybody shook hands, and there was harmony all 

"In the meantime the Secretary continues to receive 
offers of gold from unexpected sources. ' ' 

In its editorial comments upon this historical meet- 
ing of Secretary Carlisle and these bankers, the Sun 
of April 29th, says: — 


"The conference yesterday between Secretary Car- 
lisle and a number of the bankers of this city was of 
great value in that it resulted in a definite understand- 
ing of the financial policy of the administration, as 
indicated in this column last Tuesday. That policy is 
to interpose no obstacle to the natural operations and 
logical results of the Sherman law. In a word, the 
administration proposes to allow the people to reap 
the rewards of their own folly. 

"The statement of Mr. Carlisle to the New York 
bankers makes it clear that, while Mr. Cleveland works 
in Congress, the bankers will be expected to work, not 
in New York only, but throughout the country, doing 
their utmost to pinch business everywhere in the ex- 
pectation of causing a money crisis that will affect 
Congress powerfully from every quarter. There is an 
explicitness in these declarations and a boldness in 
making them that would be astounding were not the 
country too familiar with Mr. Cleveland and his 
methods to be astonished by anything from him. ' ' 

These utterances of the Sun became prophecy, in 
view of the means utilized by President Cleveland in 
forcing a repeal of the Sherman law. He "worked in 
Congress" with the immense patronage at his disposal, 
as subsequent events demonstrated to a certainty. 

On May ist, the Sun announced that President 
Cleveland would soon call an extra session of Congress, 
and urge upon that body an immediate repeal of the 
Sherman law. It said: — 

"There is to be an extra session of Congress to afford 
the opportunity of repealing the Sherman law as soon 
as possible. War will be opened against silver, nota- 
bly the Sherman law. ' ' 

During the waging of this war against silver by the 
national banking money power, aided by President 
Cleveland, the Herschell Commission was in session 


in London, having under deliberation the question of 
closing the mints of India to free coinage. 

The only obstacle in the way of England forcing 
India to a gold standard was the existence of the Sher- 
man law. 

This commission was informed of every step taken 
by the national banking money power and by Presi- 
dent Cleveland to coerce Congress into repealing that 

Sir Reginald Welby, who appeared before that com- 
mission as an expert financier, after the speech of Sec- 
retary Foster at the Delmonico banquet was quoted by 
the chairman, informed that body, that *' Americans 
calmly told him (authorities with whom he discussed 
the silver matter) that, law or no law, the intention is 
to maintain the equality with gold and to suspend the 
purchase of silver if necessary, that this was the per- 
manent policy of the Treasury, and account is taken 
of it, and banks act upon it. " 

The only authority, from whom this witness could 
have received such information, was Ambassador Bay- 
ard, who, during his service in the United States Sen- 
ate was a rigid gold monometallist, and an ardent sup- 
porter of national banks. 

The Herschell Commission was informed that Presi- 
dent Cleveland would call an extra session of Congress 
and force a repeal of the Sherman law. 

The commission at once closed its deliberations, 
made a report recommending that the mints of India 
be closed to the free coinage of silver, which was done 
on the 25th of June, 1893. 

On June 27th, two days after the mints of India were 
closed to the free coinage of silver, Henry Clews, the 


official mouthpiece of Wall street, published the follow- 
ing comment on the situation. He said : — 

"There is every reason why Congress should be 
brought together at the very earliest possible day. 
The houses that were engaged until lately in shipping 
gold became so zealous in that enterprise that they 
tried to outstrip each other. The result was that more 
gold was actually shipped than Europe required. The 
natural result must appear in the return of the surplus 
thus exported. Exchange has now fallen, indeed, to 
the specie-importing point. As soon as our crops ripen, 
there will be inevitably a return of a good deal of gold 
to the country. One of the arguments in favor of the 
repeal of the Sherman law has been that the baser 
metal has driven the finer metal out of the country. 
In a little while, with gold returning to us, the strength 
of that argument will be sapped. An early session of 
Congress will leave the argument still in full force. ' ' 

In three days after the closing of the Indian mints, 
silver fell twenty cents an ounce. 

On the 30th day of the same month, President Cleve- 
land issued his proclamation requesting Congress to 
meet in special session August 7, 1893. 



"I cannot suppose that everybody is wise. Just think 
of the folly of the United States when they were a 
debtor nation in adopting a gold coinage. They know 
nothing about currency matters; they did not know 
that it was going to increase their debt enormously. ' ' 
— Daniel Watney. 

Labor is prior to and independent of capital. Cap- 
ital is only the fruit of labor, and could never have 
existed if labor had not first existed. Labor is the 
superior of capital and deserves much the higher con- 

' ' No men living are more worthy to be trusted than 
those who toil up from poverty ; none less inclined to 
take or touch aught which they have not honestly 
earned. Let them beware of surrendering a political 
power which they already possess and which, if sur- 
rendered, will surely be used to close the doors of 
advancement against such as they, and to fix new dis- 
abilities and burdens upon them till all of liberty shall 
be lost. ' ' — Abraham Lincoln. 

The substance of the proclamation issued by Presi- 
dent Cleveland, convening the special session of Con- 
gress, is as follows: — 

"Whereas the distrust and apprehension concerning 
the financial situation, which pervade all business 
circles, have already caused great loss and damage to 
our people, and threaten to cripple our merchants, 
stop the wheels of manufacture, and bring distress 
and privation to our farmers, and withhold from our 
working men the wage of labor ; 

"And, whereas, the present perilous condition is 
largely the result of a financial policy which the ex- 



ecutive branch of the Government finds embodied in 
unwise laws which must be executed until repealed by 
Congress ; 

"Now, therefore, I, Grover Cleveland, President of 
the United States, in performance of a constitutional 
duty, do, by this proclamation declare that an ex- 
traordinary occasion requires the convening of both 
Houses of the Congress of the United States at the 
Capitol in the city of Washington on the 7th day of 
August next, at 12 o'clock noon, to the end that the 
people may be relieved, through legislation, from 
present impending danger and distress, ' ' 

On the 7th of August, 1893, Congress met promptly 
at the hour indicated in the call. Both Houses organ- 
ized and the President was notified of the fact. 

On the 8th of August, he transmitted a special mes- 
sage to the House and Senate, respectively, in which 
he set forth his reasons for existing financial depres- 
sions, and urged the repeal of the Sherman law as the 
means to dispel the distrust which wrought such dis- 
tress among the people. He said: — 

"The existence of an alarming and extraordinary 
business situation, involving the welfare and prosperity 
of all our people, has constrained me to call together 
in extra session the people's representatives in Con- 
gress, to the end that through a wise and patriotic 
exercise of the legislative duty with which they solely 
are charged, present evils may be mitigated and dan- 
gers threatening the future may be averted. 

"Our unfortunate financial plight is not the result 
of untoward events nor of conditions related to our 
natural resources; nor is it traceable to any of the 
afflictions which frequently check national growth and 
prosperity. With plenteous crops, with abundant 
promise of remunerative production and manufacture, 
with unusual invitation to safe investment, and with 
satisfactory assurance to business enterprise, suddenly 


financial distrust and fear have sprung up on every 
side. Numerous moneyed institutions have suspended 
because abundant assets were not immediately avail- 
able to meet the demands of frightened depositors. 
Surviving corporations and individuals are content 
to keep in hand the money they are usually anxious 
to loan, and those engaged in legitimate business are 
surprised to find that the securities they offer for 
loans, though heretofore satisfactory, are no longer 
accepted. Values supposed to be fixed are fast becom- 
ing conjectural, and loss and failure have invaded 
every branch of business. ' ' 

An analysis of this extract of his message adds ac- 
cumulative evidence, that this panic was pre-arranged 
by the national banks to coerce Congress to repeal the 
hated Sherman law. 

The President asserts that all the elements of pros- 
perity were at hand, and suddenly distrust sprung up 
on every side. 

In speaking of the coinage of silver, he said: — 

"Between the ist day of July, 1890, and the 15th 
day of July, 1893, the gold coin and bullion in our 
Treasury decreased more than $132,000,000, while 
during the same period the silver coin and bullion in 
the Treasury increased more than $147,000,000. 
Unless Government bonds are to be constantly issued 
and sold to replenish our exhausted gold, only to be 
again exhausted, it is apparent that the operation of 
the Silver Purchase Law now in force, leads in the direc- 
tion of the entire substitution of silver for the gold in 
the Government Treasury, and that this must be fol- 
lowed by the payment of all Government obligations 
in depreciated silver. ' ' 

A perusal of this part of his message exhibits his 
animus against silver. 
He further says: — 


"At this stage, gold and silver must part company, 
and the Government must fail in its established policy 
to maintain the two metals on a parity with each other. 
Given over to the exclusive use of a currency greatly 
depreciated according to the standard of the commer- 
cial world, we could no longer claim a place among 
nations of the first class, nor could our Government 
claim a performance of its obligation, so far as such 
an obligation has been imposed upon it, to provide for 
the use of the people the best and safest money. ' ' 

With a remarkable disregard of existing facts, he 
speaks of a depreciated currency. 
He adds: — 

' ' The knowledge in business circles among our own 
people that our Government cannot make its fiat 
equivalent to intrinsic value, nor keep inferior money 
on a parity with superior money by its own independ- 
ent efforts, has resulted in such a lack of confidence at 
home, in the stability of currency values that capital 
refuses its aid to new enterprises, while millions are 
actually withdrawn from the channels of trade and 
commerce to become idle and unproductive in the 
hands of timid owners. Foreign investors, equally 
alert, not only decline to purchase American securities, 
but make haste to sacrifice those which they already 

T^he last sentence of the above extract affords a key 
to the reason why, in the opinion of the President, the 
Sherman law should be repealed, that is, with refer- 
ence to the war waged by him against silver. 

At the very time that the President was penning this 
message, in which he asserted that the stock of silver 
coin and bullion in the Treasury had increased more 
than $147,000,000, silver certificates were sold at a 
premium of two per cent, by the money brokers of 
New York City, , . 


On the 5 th of August, two days before Congress 
met, a great banking firm of New York City had the 
following advertisement inserted in the New York 
Times and in the Herald: — 

to purchase at a premium of ^ per cent, or $7.50 per 
thousand, standard silver dollars, in sums of $1,000 or 
more, in return for our certified checks payable 
through the clearing house. 

Zimmerman & Forshav, Bankers, n Wall street." 

The object of storing up $147,000,000 of silver coin 
and bullion in the Treasury, at a time when it was at 
a premium, and then pointing at this accumulation of 
money and bullion, as a reason for requesting hostile 
legislation against it, is a damning blot upon the 

It exhibits the length to which President Cleveland 
went, in his efforts to make silver the scape-goat for 
the traitorous acts of the national banking inoney 
power, in assailing the credit of the Government, and 
in precipitating the panic. 

With reference to that part of his message, where 
President Cleveland sought to convey a wrong impres- 
sion to the people with reference to the quantity of 
silver on hand in the Treasury, and in which he asserts 
that bonds must be constantly issued to replenish the 
gold reserve, and that there was danger of the Govern- 
ment going on a silver basis, we refer to the following 
resolution passed by the Senate August 16, 1893: — 

' ' Resolved, That the Secretary of the Treasury be, 
and he is hereby, directed to report to the Senate what 
amount, if any, of the treasury notes issued under the 
act of July 14, 1890, commonly called the Sherman Act, 
have been during the present month redeemed by the 


Government, at the request of the holders thereof, in 
silver dollars, and whether the holders of such notes 
were advised, at the time of such redemption, that they 
could have gold instead of silver if they so desired. 

"The Secretary of the Treasury is also directed to 
inform the Senate whether gold coin has been recently 
presented to the Treasury Department, or any sub- 
treasury, and silver dollars asked in exchange there- 
for; and, if so, if such exchanges have been made, 
and whether the department would or could exchange 
silver dollars for gold coin if requested to do so by 
holders of gold. ' * 

On the 17 th of the same month, the Secretary, after 
reciting this resolution, replied as follows : — 

"In response thereto, I have the honor to say that 
during the present month, treasury notes issued under 
the act of July 14, 1890, amounting to $714,636, have 
been redeemed by the Government in silver dollars. 
While I do not pretend to have knowledge of the degree 
of information possessed by the holders of the notes so 
redeemed, I am of the opinion that they were fully 
advised at the time of such redemption that they could 
have gold instead of silver, if they so desired. I base this 
opinion upon the general publicity which has been given 
to the terms of the Act, no less than upon the instruc- 
tions of this department to the Treasurer and Assist- 
ant Treasurers of the United States, which have been 
to the effect that such notes were redeemable in silver 
dollars at the option of the holders. I am also sup- 
ported in my belief by the fact that in the circular of 
this department, issued to the public for their guidance 
in their dealings with the Treasury, and containing 
the regulations which govern the issue, redemption, 
and exchange of the paper currency and the gold, silver, 
and minor coins of the United States, there is a para- 
graph which reads as follows : — 

"4. 'Gold coin is issued in redemption of United 
States notes, in sums not less than $50, by the Assist- 
ant Treasurers in New York and San Francisco, and 


in redemption of treasury notes of 1890, in like sums, 
by the Treasurer and all the Assistant Treasurers. ' 

'*In further response to the resolution, I have to say 
that recently gold coin has been presented at an office 
of this department, and silver dollars asked in exchange 
therefor, and that the exchange was not made for the 
reason that all the silver dollars in the Treasury at the 
time were required under the provisions of the laws 
relating to the currency to be held in the treasury to 
cover outstanding silver certificates and treasury notes 
issued under the act of July 14, 1890. At present the 
department would not and could not exchange silver 
dollars for gold coin if requested to do so by holders of 
gold, for the same reason; but if the condition of the 
funds of the Treasury were such as to afford a margin of 
silver dollars in excess of silver certificates and treas- 
ury notes outstanding, such exchanges would be made. 
Respectfully, yours, 

J. G. Carlisle, Secretary." 

Thus, while President Cleveland was holding up the 
Treasury accumulation of silver as a scare-crow to 
frighten Congress and the people, the Secretary of the 
Treasury, nine days after President Cleveland trans- 
mitted his message to Congress, officially states that 
gold coin was recently offered for these despised ''50- 
cent dollars," and the exchange could not be made 
because the Treasury did not contain any of this money 
available to supply the demands. 

The Secretary also sa3'S that at that time, the depart- 
ment would not, and could not, exchange silver dol- 
lars for gold coin because it did not have them. 

In the face of this statement of the Secretary, where 
is that awful avalanche of silver which so frightened 
the President, that he convened Congress in special 
session to save the country from being overwhelmed in 
disaster by- it-? . -. • • ■ • 


Here were holders of gold coin actually offering gold 
coin, that superior money, for silver. 

One curious feature of this condition was, that, while 
the Secretary was paying out gold to the New York 
bankers for export, the average American citizen was 
offering to take silver in exchange for gold. 

On the loth of August, Mr. Wilson, of West Vir- 
ginia, introduced House bill No. i, providing for the 
repeal of the purchasing clause of the Sherman law. 
On the same day, a resolution was adopted limiting 
the debate on that measure to fourteen days. 

Upon the appearance of this repeal bill in the House, 
the Chambers of Commerce, Boards of Trade, and 
various other commercial bodies flooded Congress with 
petitions praying for the repeal of that law. 

The newspapers of the East kept up a terrific din 
urging Congress to prompt action. 

Meanwhile, a great debate was going on in the 
House. On the 12th of August, Mr. Hendrix, a na- 
tional banker, representing a Brooklyn district, deliv- 
ered a speech in the House urging the repeal of the 
purchasing clause. He said: — 

** Repeal the Sherman silver law, gentlemen; ad- 
journ and go home ; and let the country take care of 
the rest. ' ' 

Further on, he predicted that a repeal of this law 
would compel England to make proposals for a mon- 
etary conference, whereupon the following colloquy 
took place between Mr. Hendrix and Mr. Bland: — 

Mr. Hendrix: Let us try the experiment just once 
and see whether we cannot bring this proud old lady 
down from her perch. I predict to you that inside of 
three months^before this Congress meets again— if 
you repeal this Sherman law and adjourn, England will 


make proposals to this country to come into a monetary 
conference and see what can be done for the sake of 
her ward, India. The proposition is already said to 
have come through financial magnates. Their names 
are not given, and therefore I distrust the information, 
because when men are mentioned I like to know where 
I can find them. 

Mr. Bland: Will the gentleman allow me a question 
right there? 

Mr. Hendrix: Yes, sir. 

Mr. Bland: I imderstood the gentleman to say a 
moment ago that we were evoluting toward a gold 

Mr. Hendrix: Yes, sir. 

Mr. Bland: And now you claim that England is 
evoluting toward silver. [Laughter.] 

Such was the absurd inconsistency in which this 
national bank member of Congress involved himself. 
On the same day, M. D. Harter, of Ohio, also a na- 
tional banker, with a view to show that there was an 
abundance of money in circulation, made the following 
vStatement : — 

'* Gentlemen talk a good deal about our circulation 
per capita. I have very little faith in this per capita 
claptrap. Let us talk a little about our per capita cir- 
culation. They tell us that we have got $24 of circula- 
tion per capita, but under our banking methods what 
have we got? First, the national banks have $27 per 
capita, as represented by deposits ; the savings banks 
hold $2 7 per capita ; for the trust companies and the pri- 
vate banks $18 is a very small estimate. Add these 
figures together and you will find what amount of cir- 
culation your banking methods give you. They give 
you $72 per capita. In other words, through this 
machinery of banking we have increased the currency 
of the country three times over. But that is not all. 
Look at the clearing house returns. They show that 
for the year ending with the 30th of June last, we had 


exchanges amounting to $i,ooo per capita throughout 
this country. ' ' 

In less than five minutes after this deliverance, he 
utterly overthrew his former assertions by the follow- 

"Your boasted millionaires, your owners of banks, 
your men who employ thousands of operatives in their 
manufactories, are begging at the doors of the banks 
for accommodations as small as §ioo and $200. And 
here at the capital of this great nation, with every- 
thing, according to the theory of the silver men, to 
make prosperity, if you go with a New York draft to a 
bank, a good bank — for there are none but good banks 
in Washington and not very many of any other kind 
in the United States — if you go to any of these banks 
with a draft on New York for $40, $50, or $100, you 
can scarcely get it cashed. " 

A perusal of the Congressional Record, containing 
this debate, will bear out the statement that every gold 
standard advocate who urged the repeal of the Sher- 
man law, produced arguments in favor of repeal that 
ate each other up as fast as they issued from his mouth. 
Hon. Burke Cockran, that arrogant and much-vaunted 
orator, in the course of one of his usual frothy speeches, 
made the following statement, August 26th: — 

"Mr. Speaker, I venture the assertion that we are 
not suffering to-day from a lack of money, but from a 
redundancy of money ; and I think that proposition can 
be demonstrated to the satisfaction of any man who 
sits in this Hall. According to the statement of the 
Secretary of the Treasury the circulation to-day exceeds 
by some seventy millions the amount in circulation 
last year, but last year the volume of business was 
vastly greater than it is to-day. If a smaller amount 
of money be able to circulate a greater quantity of 
commodities, will anybody pretend that the quantity 
of money we have now is not sufficient for all the pur- 
poses of commerce?" 


Fourteen days preceding this statement of Mr. Cock- 
ran, he had a check for $ioo payable on a New York 
bank, and he could not get it cashed in Washington, 
because at that time the banks of the former city 
refused to pay the checks of their depositors. 

Representative Bowers, of California, gives the fol- 
lowing version of this fact, he said : — 

"A curious circumstance happened to me yesterday. 
One of my constituents of California came to me with 
a $50 check on a New York national bank, drawn in 
Rhode Island, a few hours from here, and could not 
get it cashed at the banks in Washington. To-day, 
my friend, Colonel Cockran, many of you know him, 
came to me with a check for a hundred dollars, drawn 
on a New York bank, and he could not get it cashed 
in Washington. I sent it off for collection. ' ' 

This statement of Mr. Bowers was made in the pres- 
ence of Mr. Cockran, August 12, 1893, and yet, in 
view of this fact, the latter subsequently asserted that 
the country was suffering from a redundancy of 
money ! 

The mendacity of those members who spoke for 
repeal was shameless in the extreme. 

Mr. Patterson, of Tennessee, strongly denounced 
silver in a speech made by him August 14th. He 
declared that the cause of the panic orginated from 
the fear of the people against the use of depreciated 

At this identical period, the New York banks were 
offering a premium for the standard silver dollar. 

The following debate took place between him and 
Mr. Williams: — 

Mr. Williams, of Mississippi : If it be true that the 
masses who are scared by the causes which the gentle* 


man states, but which they do not understand, and 
that the capitalist, who does understand this question, 
is scared for a different reason, why is it that the cap- 
italists are to-day paying a premium for the silver dol- 
lar in New York City? 

Mr. Patterson: Well, that, Mr. Speaker, is a busi- 
ness matter which I have not investigated. [Laugh- 

Mr. Bynum : They are paying a premium for paper 
money, too. 

Mr. Patterson : Yes, they are paying a premium, 
I understand, for other small currency. I cannot 
give the reason for that, unless it be to secure cur- 
rency to pay wage-earners. The question is outside 
my line of thought and of my argument. 

On the same day, Mr. Harter said that the silver 
dollar was worth only fifty- eight cents. 

The following colloquy took place between him and 
Mr. Cox, of Tennessee : — 

Mr. Cox: Will the gentleman from Ohio yield for 
an interruption? 

Mr. Harter: I yield with pleasure to my friend 
from Tennessee. 

Mr. Cox : I have listened with a great deal of pleas- 
ure to the gentleman's argument. He has stated that 
the silver dollar is worth to-day fifty-four cents. 

Mr. Harter: Fifty-eight cents. 

Mr. Cox : Well, fifty-eight cents. Now, the question 
is, do you know of any man in the United States who 
has silver dollars that he will sell at that price, fifty- 
eight cents? 

Mr. Harter: Certainly not, under present condi- 
tions. But I know every man who has a silver dol- 

Mr. Cox : One moment, please. Does not the 58-cent 
silver dollar buy just as much of the products of this 
country as any other dollar? 

Mr. Harter : To that I answer yes. But that is not 


the point. That is the present condition under limited 
coinage, but you are proposing to change it. In fur- 
ther answer to my friend from Tennessee, whom I 
regard as an authority on his side of this subject, I say 
to him that while that is true to-day, the very morning 
that you have by your law established free coinage in 
this country, then it ceases to be true, and that every 
dollar in existence which is now held up to its full 
nominal value by our present law will sink to fifty- 
eight cents, the bullion value, as soon as your law 
becomes operative. 

This is an example of the reckless statements put 
forth by these Cuckoo statement. 

On August 2 1 St, Mr. Cooper, of Indiana, who, by 
some mysterious process, had suddenly become an 
advocate of the gold standard national banking system, 
delivered a speech laudatory of credit. He said : — 

"Some gentlemen may ask. Why not have more 
money and less credit? My answer to that is this with 
credit you would not need the money and you would 
not want it, and without credit it would not circulate, 
and you could not get it, however great the volume 
might be. Besides, the world is not moving in that 
direction. The time has come when *a good name is 
rather to be chosen,' even in the commercial world, 
'than great riches.' A good name will cause the 
transfer of more property to-day than all the camels 
of Job could have carried. A good name unlocks the 
vaults of the usurer, turns the wheels of industry, and 
sets the sails of commerce upon the seas. Cash is the 
law of the savage, confidence an inspiration and 
instrument of civilization." 

At the time he made those remarks, the great national 
banks of New York City were discounting the checks 
of their depositors. 

This distinguished (?) statesman, after his failure to 
return to Congress in 1894, gladly accepted the post- 


mastership of a small city, in order to obtain some of 
that cash which he had denounced as "the law of the 
savage. ' ' 

On August 14th, Mr. Boatner, who opposed the 
striking down of silver, severely arraigned the sup- 
porters of the repeal bill. He said : — 

"I charge, sir, that the advocates of this measure, 
these thick-and-thin gold men of the Democratic party 
and of the Republican party who have been endeavor- 
ing ever since I have been in Congress to force this 
Government to an issue of cheap bonds, are responsible 
for the excitement which has created the destruction 
of public confidence, and has caused a run upon the 
banks and the withdrawal of large amounts of money 
from circulation. They are the men who have sown 
the wind, and we are now reaping the whirlwind. 
There is nothing in or about the Sherman law, there 
is no deduction that can be drawn from that law, which 
would justify anybody in making the assertion that 
the United States Government is not good for every 
obligation that it has put upon the market. ' ' 

This charge of conspiracy on the part of the gold 
standard national banking element in the House was 
not denied by the supporters of that system. 

On the 2 1 St of August, Mr. Cox made the following 
attack upon Mr. Hendrix and the other national bank 
members of Congress. He said: — 

'*Mr. Hendrix, who sits just in front of me, delivered 
his defense of his position for this repeal. I charge 
here in his presence that nearly one year ago there was 
issued from the Bankers' Association at New York a 
circular to the rural banks all over this country, asking 
for a contribution to procure the repeal of the Sherman 
act. Does he or any man from New York City deny 
it? That was before the panic. True, a second cir- 
cular followed, condemning the clerk of that associa- 
tion for issuing that circular, and probably discharged 


him; but have you retracted the purpose announced? 
I want a reply if I have done any one injustice. 

"Did you tacitly agree or discuss the question in 
New York that you would not rediscount notes from 
the South unless we would vote for the unconditional 
repeal of the Sherman act? Did not one of your 
speakers in one of 5^0 ur bankers' meetings openly de- 
clare that you could and would control the finances of 
this Government? 

' ' Did your papers not boast that you had in your city 
two hundred millions of gold hoarded in your vaults? 

"If I do any man injustice, I pause for correction. 
Here is the fundamental error. Let this Government 
rule for the people. Let it rule its finances for the 
purpose of trade and commerce, and forever let it put 
its everlasting stamp of indignation and condemnation 
on legislation that legislates one man's property up 
and another's down. Give us a fair and equal fight for 
human happiness. [Applause.]" 

At the time this debate was going on in the House, 
the banks of New York were refusing to pay checks 
drawn on deposits ; and were issuing Clearing House 
certificates in lieu of money. 

Exchange on New York banks ranged at from ten 
to fifty dollars on the thousand. 

After quoting a New York bank circular, Mr. Hatch, 
of Missouri, made the following criticism on the national 
banks of that city. 

On August 23d, he said: — 

"Fifty dollars on a thousand dollars in exchange on 
New York. Why, sir, usually in the West New 
York exchange is at a small premium or at par. 
I received a few days ago a letter from the cashier 
of a bank in which I do my business at Hannibal, Mo. 
He informed me that he could not take New York 
exchange for anything less than $1 on the hundred 
dollars or $10 on the thousand dollars. 


*'I thought that enormous; but here it appears by 
this New York circular that there are other cities in 
the country that have not as much confidence in the 
New York banking- system as the bankers in my own 
town. In some of these other cities they will not take 
exchange on New York at less than $50 on the §1,000. 

"What have the banks of New York been doing to 
keep up confidence. Nobody ever lost confidence in 
the banks of New York until after they entered into 
that conspiracy in April last to produce a panic in this 
country — a money famine and a panic. But they lost 
confidence in each other. 

"Let me tell my New York friends right now that, 
m my judgment, the most herculean task ever attempted 
in any legislative body on the face of God's green earth 
since the creation of Adam down to the present time 
will be to restore confidence between the New York 
bankers. They know each other too well. [Laughter. ] 
And there is such a splendid minority of them that 
have embellished the pages of New York financial his- 
tory in the last few years by moving across the line 
into Canada, that I suppose the next step would be to 
establish confidence between the bankers of New 
York on this side and those on the other side of the 
Canadian border. 

"Mr. Speaker, I offered on yesterday evening to give 
my distinguished friend from New York [Mr. Fellows] 
part of my time, and I intended if he accepted it to 
make but one condition, because we all know him to 
be a splendid lawyer ; but I wanted some legal ability 
to blaze the road along that way so as to point out in a 
clear manner the use of and the character of what is 
called 'clearing house certificates.' 

"I ask the gentleman, or any other gentleman from 
New York when he gets the floor, to please tell us 
what a clearing house certificate is, and how it can 
be used as money without violating the laws of the 
United States? Do you pay any tax on it? What is 
it? The promise to pay of a class of men who will not 
take even their own promises to each other! And 


tell me another thing. Why is it every national bank 
in the city of New York to-day, and for the past thirty 
days, has been doing business in open and notorious 
violation of the law, absolutely refusing to pay its 
checks when presented at the counter? Why is that?" 

This challenge of Mr. Hatch was not accepted by 
the able and brilliant Fellows. 

The Missouri congressman truthfully portrayed the 
methods and character of the New York bankers in 
their systematic efforts to influence the legislation of 

A member of that Congress bore testimony to the 
fact, that he had seventeen thousand dollars on deposit 
in a bank in New York City, and that he had presented 
a check for two hundred dollars at its counter for pay- 
ment, and that he was refused his own money. 

Matthew Marshal, the able financial editor of the 
New York Sun, exposed the conspiracy of the banks 
in aggpravating the distress then prevalent. 

On August 2 1, 1893, ^^ said: — 

**The question is, how much longer our banks can, 
without bringing on a catastrophe, continue in their 
course of increasing the volume of clearing house 
certificates and of denying to their depositors payment 
in lawful money of their checks. Thus far depositors 
have been very patient, and have good-naturedly sub- 
mitted to the enforced scaling down of their dues ; but 
they cannot be expected to submit to it forever. A 
bank that cannot or will not pay claims against it in 
the regular course of business is, by the decisions of 
our State courts, insolvent, and, if the Bankrupt Act of 
1867 were now in force, a refusal by a bank for forty 
days to pay checks on demand would be a commission 
of bankruptcy. ' ' 

The clique of nationl bank congressmen did not even 
attempt to repel these bitter accusations. They knew 
they were true in every particular. 


During the panic now raging, a stock gambler of 
Wall street rushed into the Stock exchange, and 
excitedly announced that one of the greatest banks in 
the city had failed. 

A tremendous fall of stocks immediately took place, 
and this knave bought in vast quantities of the secur- 
ities injuriously affected by this false rumor. 

It is said that this scheme netted this stock gambler 
the sum of $10,000,000. 

On August 18, Hon. J. C. Sibley referred to the 
false reports spread abroad by these lawless speculators, 
and he instanced this recent case. He said : — 

"Another reason for your panic has been chargeable 
directly to the action of your Wall street gamblers, 
who have circulated rumors by the wholesale. They 
permitted one of these gamblers to go into their cham- 
ber a few weeks ago and announce that one of the 
greatest banks in New York had failed. And how did 
that body punish him for putting in circulation this 
false report? They suspended him for a year; and it 
is said his profits through bear operations since this 
panic commenced have netted him in clear cash over 
$10,000,000. I think he can afford to stand the sus- 
pension. ' ' 

Acts like that described by Congressman Sibley never 
failed to win the admiration of the stock gambling 

Men who were able to engineer a comsummate piece 
of villainy like the above to a successful termination, 
were hailed as heroes by the smaller fry of Wall street. 

The press of the city glowingly referred to such 
achievements as "master strokes of financial genius." 

Mr. Sibley spoke of the great decline in the farm 
lands since 1873. He said: — 

' ' We can only judge of the future by the past and 


the present. Everything has declined since you demon- 
etized silver, since you commenced hostile legislation 
against it. Pennsylvania farm lands to-day are not 
worth forty cents upon the dollar of what they were 
in 1873. Is not that correct? 

*'Mr. Hicks: I am sorry to say it is the fact." 

The gentleman upon whom Mr. Sibley called to 
verify his statement, was a Republican member of 
Congress, and a fanatical believer in the efficacy of a 
high protective tariff, and he made this admission long 
before the Wilson tariff bill became a law. 

On August 25th, Representative Doolittle, of Wash- 
ington State, exposed the means practiced by the 
bankers of the East in strangling the industries of the 
Pacific coast. He said : — 

* ' There are many things I would be glad to say upon 
this subject, but my time is limited. A great deal 
has been said during this debate as to the cause or 
causes of the trouble that is now upon us. When I 
came to this city last January to witness the closing of 
the Fifty-second Congress, I left my home on the 
shores of Puget Sound, when, so far as confidence was 
concerned, everything was as placid as a May morning. 
There was not a man who had not the utmost con- 
fidence in the banks throughout that entire country. 
I know that during the latter days of that Congress 
an effort was made here to repeal this purchasing 
clause of the so-called Sherman law, and also to obtain 
an issue of gold-bearing bonds from the Government. 

"I know that those attempts failed. Upon reaching 
my home early in April, I found that circulars were 
being received by every banking man and by people 
engaged in every business on the Pacific coast, from 
New York and other money centers of the country. I 
know that these circulars were full of statements fore- 
boding financial disaster and ruin. They contained 
notice that credits should be shortened and that money 
should be withdrawn in many instances where it had 


been loaned to people in the West ; and all this trouble 
was to result from the failure of the Fifty-second Con- 
gress in its last session to repeal the so-called Sherman 
Act. These people, interested selfishly in the repeal of 
the Sherman law and in their attempt to cause the 
issuance of gold-bearing bonds, were endeavoring to 
stampede business men all over the Western country 
into a support of their position. 

*'Now, Mr. Speaker, it is much easier for people to 
tear down credit and confidence than it is to establish 
that credit and confidence. The result of sending out 
these circulars over the West was that the confidence 
of people regarding financial conditions began to 
wane ; they began to lose confidence in the banking 
and other financial institutions of their States and 
towns. This was the immediate cause, I know, gen- 
erally over the Pacific coast of the failures that fol- 
lowed. ' ' 

In the light of this accumulated evidence, who will 
deny that the murderous panic of 1893 was planned by 
the national banking money power to force a repeal of 
the purchasing clause? 

The whole tenor of the arguments advanced by those 
who urged the repeal of the purchasing clause of the 
Sherman law was to restore ''confidence," to prevent 
the exportation of gold to foreign countries, and to 
maintain the credit of the United States. 

But the following declaration made by Mr. Hendrix, 
President of the First National Bank of New York City, 
otherwise known as "Fort Sherman, " clearly shows 
what influence was brought to bear upon Congress to 
procure this legislation. 

On August 28th, he said: — 

"There are petitions from nearly thirteen thousand 
bankers in the hands of different members here which 
register the sentiment against the foolishness of our 


silver-supporting policy. The wave of popular opinion 
has reached this House. It betokens a revolution in 
the American mind. We are not to fool any longer 
with a depreciated and a rejected money metal, and try 
to bear alone a burden which civilized nations should 
share in common. The silver problem will, after our 
action, remain in the world, and on the world, but not 
on this country alone. We can take care of the forty 
cents of credit in our silver dollar. We can keep all of 
our large stock in free circulation on a parity with gold, 
and the banks will take care to keep in such position 
as to meet the demands for foreign exchanges. ' ' 

The debate upon the repeal bill came to an end Au- 
gust 28th, and a vote was taken on the measure, and 
it was adopted by 239 yeas to 108 nays. 

An analysis of this vote will prove that the Eastern 
Democrats and Republicans cast an almost solid vote 
for the bill. It is also evident that President Cleve- 
land "worked in Congress" by means of the enormous 
influence of his patronage, for an inspection of the vote 
bears testimony to the fact, that scores of members of 
the House voted to repeal the purchasing clause who 
had been lifelong advocates of the free coinage of 

The unconditional repeal of that clause did not leave 
a single law upon the statute-books of the nation that 
would provide for the coinage of a single additional 
dollar of silver. 

The national banking money power once more gained 
its point by wholly eliminating the further use of silver 
as money. 

Immediately upon the repeal of the purchasing clause 
by the House, the New York bankers cabled the news 
to London. 

The action of the House gave great satisfaction to 


the money-lending classes of England, as the following 
extracts from the London press abundantly prove. 

In speaking of the effect of the action of the House 
upon the price of silver, the London Times, on August 
29th, said: — 

**It is the expiring effort of the silver party. Silver, 
deprived of the support of the Sherman Act, will sink 
to a level too low to suit the bi-metallist notions of a 
proper ratio, or to facilitate the establishment of a 
double standard. ' * 

On the same day the Pall Mall Gazette editorially 
said : — 

"When confidence and credit are restored by the 
repeal of the pernicious Sherman Act, the task of fiscal 
reform (single gold standard) in the United States will 
become easier." 

The Daily News of the same date thus expressed its 
views : — 

"The Daily News to-day expresses the opinion that 
the repeal of the Sherman Act will prove a serious blow 
to bi-metallists throughout the world, but a great vic- 
tory for common sense and the single standard. " 

It appears, therefore, that the sole object of repealing 
the purchasing clause of the Sherman law was for the 
express purpose of depriving silver of its only support, 
thus lowering its value, and thereby furnishing reasons 
against its use as money. 

Is it not singular, that every effort made by the 
associated banks of the United States against silver, 
met the hearty approval of the influential press of Great 



' ' I believe in the people, in universal suffrage as fitted 
to secure the best results that human nature leaves 
possible. If corruption seems rolling over us like a 
flood, it is not the corruption of the humbler classes — 
it is millionaires, who steal banks, mills and railways; 
it is defaulters, who live in palaces and make away with 
millions ; it is money kings, who buy up Congress ; it 
is the demagogues and editors in purple and fine linen, 
who bid $50,000 for the presidency itself." — Wendell 

While this great debate was taking place in the 
House, the turmoil in the business circles throughout 
the United States was beyond the powers of descrip- 
tion. Hundreds of great failures were occurring, 
including banks as well as other lines of business. 

The colossal credit system, which had been built up 
by the national banking money power, fell with a crash 
that shook the business interests of the nation from one 
end to the other. 

The juggernaut which the New York bankers had 
sent forth to trample down the business of the country in 
order to influence Congress, had got beyond the control 
of those lawless financiers who had assailed the credit 
of the nation, and who had destroyed the property rights 
of tens of thousands. 

The concerted cry of ''want of confidence" in the 
ability of the Government to redeem its obligations, 
returned, with ten-fold force, to assail the very national 
banks which had originated that false and delusive 



Thousands of depositors immediately withdrew their 
money from the banks, aggravating the distress then 

That the rumors set afloat by the banks, attacking 
the credit of the Government, did not impair the con- 
fidence of the depositors in its financial ability is dem- 
onstrated to a certainty. 

Greenbacks, treasury notes, silver, and silver cer- 
tificates, were taken with avidity by the withdrawing 
depositors and hoarded. Gold was not demanded. 

In a short time, the New York banks were unable to 
pay their depositors, and they, in common with the 
banks of Boston and Philadelphia, issued clearing house 
certificates to the amount of $63,000,000, which were 
used to pay their depositors in lieu of money. 

This act of the associated banks of the East, in issu- 
ing these certificates, was a clear violation of the law 
which assessed a tax of ten per cent. , upon State bank 
notes, and all other paper designed to circulate as 
money except national bank notes. 

The very banking power, which had demanded and 
secured the passage of that law, was the first who 
violated its provisions. 

Besides these lawless acts, the New York banks 
refused to cash the checks of their depositors, and 
charged a premium of three per cent, for paying out 
the money which they owed to the public. 

In the meantime, the money brokers of New York 
were charging enormous rates of interest, and were 
selling money at a premium ranging from three to 
seven per cent. 

The Washington Post is authority for the statement 
that one firm of money brokers in New York City 


made a profit of $600,000 by selling currency at a 

A financial writer of New York City stated that 
Russell Sage made a daily profit of twenty thousand 
dollars by loaning money at an enormous rate of inter- 
est during the panic. 

As proof of the foregoing facts, a New York bank- 
ing house issued the following circular letter August 

"The New York City bankers have $37,380,000 cer- 
tificates outstanding. Boston has $ 1 1 , 1 00, 000. Other 
bankers in the South and West perhaps have enough 
more out to make fifty millions of bank certificates. 
Adding these various amounts together, we find a pos- 
sible increase of about one hundred millions since July 
I to replace the unknown amount of currency and gold 
drawn out of the banks and hoarded in vaults and 
other places since May last, "Where it resembled the 
one talent more than the ten talents." 

"Currency commands three per cent, premium, and 
has sold as high as five per cent. Exchange on this 
city from many Western cities has recently ranged 
from five to fifty dollars per $1,000. Many Western 
people claim the degree of credit desired by Eastern 
bankers is shown by their willingness to pay depositors. 
Eastern banks appear to have no sympathy for Western 
methods in not issuing bank certificates. Many indi- 
viduals have sold their checks on the street for funds 
to meet maturing obligations or make needed pur- 
chases. Credit seems to have been strained from here 
to the Pacific coast, and attacked on all sides and ben- 
efiting but few. ' ' 

The Mercantile National Bank of New York City was 
the only bank that did not exact unlawful rates of 

Mr. St. John was at the head of this institution, and 


he would not permit this bank to practice the extortion 
in vogue at the other banks. 

When before the House Committee on Currency, in 
December, 1894, he testified as follows: — 

Mr. Haugen : What rate of interest did you charge 
during the panic a year ago? 

Mr. St. John : The Mercantile National Bank of 
New York never exacts more than 6 per cent, from its 
dealers, under the present administration of thirteen 
years. There was one instance during that panic of 
1893 in which we did exact 8 per cent., I think. We 
had been badly abused, and might have exacted 20 
per cent. 

Mr. Haugen: What was the current rate about? 

Mr. St. John : There was no current rate. Lenders 
got anything they chose to exact. 

Mr. Haugen: It was much higher than it is now? 

Mr. St. John: Yes; brokers paid on prime security 
three-fourths per cent, per day and 6 per cent, per 
annum; 276 per cent, per annum for some days. 

Mr. Johnson, of Indiana: Can you give us, in a 
succinct form, your explanation as to how there can be 
a remedy for the high price of money in the agricul- 
tural districts in crop-moving times? 

Mr. St. John: If there were a larger aggregate of 
money in the United States it could circulate over our 
vast territory without occasioning alarm. If I knew 
that the world believed that Louisville is absolutely 
prosperous, I would like to lend much of my money in 
Louisville. I would do so with the same certainty that 
I have mentioned as pertaining to New York. I 
merely take Louisville as the illustration, because you 
mention it. 

The statements of President St. John shows the 
extent of the panic in New York City, and affords a 
view of the Shylock tactics practiced by the money 
lords of the East. 


It has been asserted by competent authority, that 
while these banks were refusing to pay out the funds 
due their depositors, that this money was loaned out 
by them through brokers at the rates of interest stated 
by Mr. St. John, viz., 276 per centum. 

Not only did the banks of New York City disobey 
the law by issuing clearing house certificates, but the 
great elevator owners and flour manufacturers of Min- 
neapolis bought millions of bushels of wheat by paying 
for it in certificates similar to those of New York City. 

The clearing house of Birmingham, Ala., issued 
certificates for sums as low as fifty cents. 

The excuse tendered by the banks for not paying out 
money was, that the depositors were frightened by a 
*'want of confidence," and that they, the banks, had 
not the money to pay claims against them. 

It was during this time of scarcity of money, that the 
Hon. Bourke Cockran declared that the country was suf- 
fering from a redundancy of currency ! 

The unlawful acts of the New York banks became so 
notorious that, on the 2 2d of August, 1893, the follow- 
ing resolutions of inquiry were offered in the Senate 
by Mr. Peffer: — 

** Resolved, That the Secretary of the Treasury be 
directed to inform the Senate — 

"First, Whether, and in what respect, the national 
banks, or any of them, in the cities of Boston, New 
York, and Philadelphia are being now conducted in 
violation of law. 

''Second, Whether said banks are paying depositors* 
checks promptly in lawful money. 

"Third, Whether said banks, or any of them, are 
demanding rates of interest higher than those provided 
by law for the loan of money or in discounting notes 
and bills. ' ' 


Immediately upon the appearance of this resolution, 
Senator McPherson, the national bank sugar trust 
speculator, moved its reference to the Finance Com- 

This was done for the purpose of smothering the 

Senator Gorman apologized for the delinquent banks, 
and asserted that, if the Comptroller strictly enforced 
the law, many of these banks would be compelled to 
close their doors. He argued that the banks were the 
best judges of what should be done in the case. 

In reply to the remarks of Senators McPherson and 
Gorman, Senator Hill said: — 

"I am as anxious, sir, as the Senator from Maryland 
can possibly be to relieve the financial distress of this 
country. I will go with him as far as he will go in the 
effort to keep out partisanship in the disposition of the 
financial question. From the hour we first met in this 
body my efforts have been toward bringing about a 
proper solution of the question , and my efforts have 
been just as zealous, just as earnest, as have been the 
efforts of the Senator from Maryland. My position 
upon this great financial question has not been misun- 
derstood. I spoke upon this subject last February 
when I thought I saw the danger coming to the coun- 
try. I did not hear the eloquent voices of some other 
gentlemen aiding me in that contest. 

''What is the precise question? Gentlemen do not 
understand one another upon the other side of it. I 
thought I heard an intimation that there had been 
something wrong somewhere. I judged that much 
from the suggestion of the Senator from Massachusetts. 
He disavowed any intention of saying that there had 
been any wrong anywhere. Then the Senator from 
Maryland steps forward and says, 'Yes; there has been 
a violation of the law, a conceded violation of the law, 
on the part of national banks, winked at by officials. ' 


That is the idea we get from his remarks. I do not 
know whether that is true or not. I think, whether it 
is true or not, it ought to be investigated. 

*'What do you want to refer to this committee? Is 
it a committee of investigation to investigate the acts 
of the Comptroller of the Currency? — No. For what 
purpose is the resolution to be referred? As I under- 
stand the Senator from Maryland, the only object of a 
reference to the committee is for the purpose of not 
acting upon it, for the purpose of suppressing it in the 
interest of the public welfare. That seems to be the 
idea. There has never been a cause so bad in the his- 
tory of the country that its advocates have not always 
felt that they acted in the interest of the public wel- 

"The resolution is a simple one. What is it? It 
simply asks the Comptroller of the Currency to give us 
certain information in his possession as to what has 
been done in his office, or by the national banks of the 
country, so far as he understands what has been done. 
The details of the resolution I do not propose to give. 
What is the objection to it? Is it a proposition to try 
the Comptroller of the Currency? Is it a proposition 
to arraign the national banks for a violation of their 
duty? — No; it is a simple, ordinary and proper resolu- 
tion ; and I say courtesy to the distinguished Senator 
from Kansas entitles the resolution to be passed here 
and now. What reason can there be given against it? 

"The Senator from Maryland says there are great 
times in the history of the country when we must rise 
above partisanship. I agree with him. What has that 
to do with this question?^ There are great times when 
we must be equal to the occasion. What has that to 
do with suppressing an ordinary resolution of inquiry? 
The resolution does not provide for the appointment 
of a committee to investigate anybody. The resolution 
does not provide for making charges against anybody. 

"Are you afraid of the facts? This very debate will 
cause inquiry into what has been done. This debate 
in the Senate of the United States will direct attention 


to the question, and every person will be apt to inquire 
to-morrow morning: what has been done by national 
banks, and what has been done by the Comptroller of 
the Currency, that the Senate of the United States dare 
not pass a simple, ordinary resolution of inquiry? 
What are you afraid of? Are we not trying to quiet 
the existing panic? Is the panic to be quieted by such 
proceedings as this ? Are resolutions calling for inform- 
ation to be suppressed, put down, shelved, put into a 
committee and there pigeonholed? Can we not stand 
the light of day on this subject? Cannot the acts of 
our officials, whoever they may be — and I myself make 
no charges against them whatever — stand a simple 

**What will this committee do? The Senator from 
New Jersey says that the committee will look into the 
matter, and the fair inference from his remarks is that 
if they find anything wrong, they will not report the 
resolution, but if they find everything has been right, 
then they will report the resolution. Why can we not 
make that inquiry now? I appeal to the Senators 
around this Chamber that there is no reasonable, ten- 
able objection that is presented why the resolution 
should not be passed. Why should not the distin- 
guished Senator from Kansas be treated the same as 
every other member of this body? He has the same 
rights to offer a resolution and have it passed. 

'*How long is it since a resolution of inquiry has 
been referred to a committee before being allowed to 
pass? I have not heard it in the last year and a half 
that I have been here. Therefore, I say to you, it is 
not a question of patriotism. It is not a question as 
to what should be done in this great hour of distress. 
It is a simple, ordinary question of senatorial courtesy ; 
and I have heard no reason yet presented why the 
resolution of the Senator from Kansas should not be 
passed. I do not agree with him in his peculiar no- 
tions of finance. I do not belong to his party. He has 
his own views upon these questions, but he has a right 
to have any proper, legitimate information spread upon 


the records of the Senate, and there can be no objec- 
tion to it." 

Senator Washburn expressed his fears that the pass- 
age of the resolution would close almost every bank 
in the country, and place it in the hands of a receiver. 
He said : — 

'*It seems to me if the resolution is passed and we 
receive the reply which is inevitable, that it will be 
notice to the Comptroller of the Currency to administer 
the law literally and technically ; the result of which 
will be to close almost every bank in the country and 
place it in the hands of a receiver. That is a calamity 
which, it seems to me, we should look forward to with 
great hesitation. I do not believe it is the duty of 
patriotism, of party, or of good common sense to inject 
anything of that kind into the present deplorable con- 

The Senator who made the above statement was a 
supporter of the national banking system, and the 
remarks above quoted will exhibit the lawless charac- 
ter of those men, who attacked the credit of the United 
States, and who violated the laws of State and nation 
in almost every transaction in which they were en- 

During the debate on the motion to refer to the 
Finance Committee, Senator Teller said : — 

*'The banks have another function, which is to trans- 
mit money from one bank to another. Commerce can 
scarcely be carried on unless that function is in active 
force. Business cannot be done between New Orleans 
and Chicago, New Orleans and New York, and all 
around, unless bills of exchange can be used. They 
are the agencies of commerce. 

"Have these banks fulfilled that function? For 
more than six weeks the banks of the city of New 
York, and other cities which I might mention, have 


simply declined to pay drafts drawn on them by out- 
side banks for the money that those banks have on 
deposit. Between a city that is entered by at least six 
railroad trains a day, and can be reached in twenty- 
four hours, and the city of New York, the rates of 
exchange have been $3 on the hundred ; and between 
the city of New York and the city of Philadelphia there 
has been an absolute refusal on the part of the banks 
of Philadelphia to pay drafts on the city of New York 
in any kind of money. 

"I have in my drawer here a letter from a Western 
banker, who tells me that through his bank he had a 
draft of $7,000 on a Philadelphia bank, which he sent 
to a bank in the city of New York, and the bank there 
returned it to him saying, 'We will present no drafts 
to the banks of Philadelphia, because they decline to 
pay. ' Then, through other agencies, this banker sent his 
draft to Philadelphia for money admitted to belong to 
the drawer, and the banks of Philadelphia simply said: 
' We cannot afford to pay this, and we will not pay it. ' " 

Senator Butler added the following testimony to that 
adduced by Mr. Teller. He said: — 

"I would state one fact which comes within my own 
personal knowledge. I met a gentleman on a train last 
night, who informed me that, as President of a large 
manufacturing establishment in the South, he had 
deposited in one of the banks of the city of New York 
a large amount of money, and had telegraphed and 
written to that bank to send him $5,000 of currency with 
which to pay his laborers on Saturday night. 

"Mr. Allison: A national bank? 

"Mr. Butler: I am not prepared to say that it was a 
national bank — I do not know about that — but it was 
one of the banks of the city of New York. He said 
that that bank at first declined to do it, but finally sent 
him $5,000 in currency and charged him i}i per cent, 
for sending him his own money. I said to this gentle- 
man, 'You certainly did not pay it?' 'Why,' said 


he, 'I was obliged to pay it' * To pay i}4 percent, 
for sending you your own money?' *Yes, sir.' That 
is one instance. As has been stated by some Senator, 
I believe that a check on a man's own deposit has to 
be discounted at 3 per cent. 

"I have heard a great deal about the want of con- 
fidence in the country, brought about by the Sherman 
Act. The Sherman Act has about as much to do with 
that want of confidence as a pebble in a mill pond has 
to do with stirring the waters. It is, unless we are all 
misinformed, a want of honesty — and we may as well 
speak plainly — and the sooner the country finds it out 
the better it will be for everybody. ' ' 

These were but a few of the facts brought out by the 
debate on this resolution with reference to repeated 
violations of law, and of the mean oppressions 
practiced upon the people by those lawless national 
bankers, who had boasted that they would teach the 
people an "object lesson." 

The resolution was finally referred to the Finance 
Committee, which subsequently reported it back in a 
modified form and it was passed. 

On September i6th, the Deputy Comptroller made 
a report in reply thereto, in which he stated that the 
Comptroller had no official information that the national 
banks of New York, Boston, and Philadelphia were 
violating the law. 

It will be noticed that the Comptroller himself did 
not reply to the resolution, and secondly, that the 
resolution did not call for official information. Fur- 
thermore, the sub-treasury in New York City was a 
member of the Clearing House Association, and, as 
such, was cognizant of the methods of the national 
banks composing that body. 


During this time, the Senate was debating the ques- 
tion of repealing the purchasing clause of the vSherman 

On August 25th, Senator Hill, of New York, strongly- 
arraigned those men who brought on the panic. He 
said : — 

* ' Some portion of the present panic may be traced to 
a concerted effort on the part of numerous monometal- 
lists to produce it, in order to further discredit silver 
as a part of the standard money of the country. That 
fact is apparent everywhere we turn. We observe it 
in their senseless arguments constantly used against 
free bi-metallic coinage and their ceaseless endeavors 
to confuse the present issue by characterizing it as a 
contest between monometallism and bi-metallism. 
They seemed to be delighted when the first ray of 
financial trouble appeared. They hailed the recent 
action of India with ill-concealed saisf action. They 
talked against silver, morning, noon, and night. 

They denounced, not simply the Sherman silver 
purchase bill, but the future use of silver as money. 
With ghoulish glee they welcomed every bank failure, 
especially in the silver States, little dreaming that such 
failures would soon occur at their own doors. They 
encouraged the hoarding of money, they inaugurated 
the policy of refusing loans to the people even upon 
the best of security; they circulated false petitions, 
passed absurd and alarming resolutions, predicted the 
direst disaster, attacked the credit of the Government, 
sought to exact a premium upon currency, and at- 
tempted in every way to spread distrust broadcast 
throughout the land. 

"The best financial system in the world could not 
stand such an organized and vicious attack upon it. 
These disturbers — these promoters of the public peril 
— represent largely the creditor class, the men who 
desire to appreciate the gold dollar in order to sub- 
serve their own selfish interests, men who revel in hard 


times, men who drive harsh bargains with their fellow 
men in periods of financial distress, and men wholly 
unfamiliar with the true principles of monetary science. 
*'It is not strange that the present panic has been 
induced, intensified, and protracted by reason of these 
malign influences. Having contributed much to bring 
about the present exigency, these men are now utterly 
unable to control it. They have sown to the wind, 
and we are all now reaping the whirlwind together. ' ' 

The courage of the New York Senator was grandly 
illustrated in this speech, in which he points out the 
unlimited greed of those so-called financiers, to whom 
nothing was sacred during their traitorous warfare 
against the nation and the people. 

One of the singular incidents, occurring during the 
struggle for repeal, was that in which Senator Sher- 
man became a conspicuous adviser of President Cleve- 
land and Secretary Carlisle! 

The strange anomaly of this lifelong Republican 
becoming a warm supporter of the financial policy of 
the administration is one of the wonders of American 

On October 1 7th, Senator Sherman made the follow- 
ing prediction of the astonishing benefits that would 
accrue from a repeal of the Sherman law. He said : — 

"In the present condition of affairs there is no money 
to buy cotton and corn and wheat for foreign consump- 
tion. Break down the barrier now maintained by the 
Senate of the United States, check this viper called 
obstruction to the will of the majority, give the Senate 
free power and play, and in ten days from this time 
the skies will brighten, business will resume its ordi- 
nary course, and the clouds that lower upon our house 
will be in the deep bosom of the ocean buried. ' ' 

Is it not remarkable that this man, who, for many 


years, has enjoyed the reputation of being one of the 
greatest of American financiers, should influence Con- 
gress to enact the law of July 14, 1890, and then, within 
a period of three years, assert that a repeal thereof 
would brighten the skies, cause the resumption of 
business, and bury the clouds in the bosom of the 

Under the rules of the Senate, the repeal measure 
could not be forced through that body as rapidly as the 
national banking power desired. 

In this great debate upon the bill to repeal the pur- 
chasing cause of the Sherman law, those Senators in 
favor of that measure persistently urged as a reason 
for repeal that a *' flood of silver" threatened the finan- 
cial stability of the Government. 

The absurdity of that line of argument is apparent, 
when reference is had to the gold and silver production 
of the United States. 

From 1792, up to and inclusive of 1892, the value of 
gold produced in this country was $1,987,000,000, of 
silver only $1,146,869,000, excess of gold over silver, 

Senator Teller challenged the gold monometallists 
to point out where this "flood of silver" was stored up. 

They feebly referred to India! 

The New York Press indulged in a vicious tirade upon 
Senator Voorhees, Chairman of the Finance Com- 
mittee, taking him to task for what it called a derelic- 
tion of duty in not forcing a vote upon the bill. 

On August 26th, the New York Evening Post uttered 
the following implied threats because the Sherman 
law was not repealed. It said : — 


"We hear a great many reports from Washington to 
the effect that the Senate is firm against any repeal of 
the Silver Purchase law. We advise the public to at- 
tach little importance to the state of mind which pre- 
vails at the present moment in the Senate or among 
the senators' constituents. The medicine of the silver 
crisis is still working and the pangs which it produces 
will be more acute as the time goes on. One calamity 
will come thundering after another until the only pos- 
sible remedy is applied. Banks will fail, railroads will 
default, manufactories will close, workingmen will lose 
their situations, there will be a shortage of money for 
crop-moving, affairs will grow steadily worse, until the 
mind cure is effected. Senators may roar against cap- 
italists till the crack of doom without opening the 
pocketbook of one of them. In fact, the louder they 
roar, the tighter will those pocketbooks be closed. Nor 
will the time ever again come when money can be 
obtained with the customary ease so long as that silver 
law stands unrepealed. Hence we repeat that the 
frame of mind that the Senate may be in at the present 
time is no index of what it may be two weeks hence. 
There is dynamite enough in the financial situation 
to burst the Senate and both political parties. ' ' 

The Philadelphia Press of the same date said: — 

"The New York banks for several days have been 
endeavoring to bring a home influence on United 
States Senators, to induce them to vote for the repeal 
of the July silver law. 

"To this end correspondents of the New York banks 
in the West and South have been told that they need 
not expect to get money from New York until the pur- 
chasing clause was repealed, and the Southern and 
Western bankers have been strongly urged to write to 
their senators and insist that they work and vote for 
immediate repeal. This movement has given rise to 
the recent feeling in New York that the silver majority 
in the Senate could be overcome, as the influence of 


the banks of the metropolis, when concentrated on any 
object, is regarded as invincible. There is a feeling 
that the strain is not as great as it was, and improve- 
ment is hoped for. Some anxiety exists as to the action 
of savings bank depositors when the thirty and sixty 
day limit expires next month. The requirements of 
money for the crops will also be a potent factor, but 
no one is disposed to contemplate future conditions, 
especially if they are likely to be unpleasant. ' ' 

These papers were the organs of the national banks, 
and they spoke the sentiment of that power. 

On September 2 2d, the Daily Indicator, a financial 
paper of New York City, published the following: — 

*' There are ominous rumors in the street that New 
York will again put the screws on the Senate. 
Whether this is street talk or not remains to be seen ; 
but the hardening of the rate of sterling exchange at 
the time of large merchandise exports and in the 
middle of our exporting season, looks as if gold exports 
would be made to influence the silver lunatics. There 
is no question but that the banks of New York are 
still withholding money from merchants, while possess- 
ing millions of idle cash, because of a tacit arrangement 
not to unloose it until the Senate votes for repeal. Now, 
if the gold exporting movement began, that would be 
another striking occurrence on which to impinge pub- 
lic thought, and on which popular argument could be 
based. There is one point lacking in any program 
of this kind. The public have learned that the influ- 
ence of the silver bill on business has been overesti- 
mated. The predictions of those who have urged that 
everything depended on repeal have not been verified. 
Indeed, much that was said has been disproved by 
recent occurrences, and the feeling that the influence 
of the law was wildly exaggerated for political effect 
has spread at Washington and elsewhere. Exports of 
gold at this time might emphasize this feeling and, 
rightly or wrongly, it would be said that the gold went 


out at the behest of Wall street. Not an hour would 
be gained in the Senate for the repeal cause by any 
such movement." 

These are but a few of the many thousand bold 
utterances of the subsidized press of the national 
banking money power, and they afford conclusive evi- 
dence that the panic of 1 893 emanated from the con- 
centrated money power of the East. 

If the foregoing are not evidence of the power of 
the New York banks to destroy the business of the 
country, then no facts could ever be proven. 

September 29th, the New York Tribune cautioned 
the bankers to refrain from giving publicity to their 
threats. It said : — 

**The Tribune trusts that bankers of this city will 
permit a suggestion which is for their own as well as 
the public interest. Several of them are reported as 
having made particularly alarming statements regard- 
ing the disasters which, they venture to predict, will 
follow a failure of the Senate to pass the pending Silver 
Purchase repeal bill. Such statements are not likely 
to do any good whatever, but are eminently calculated 
to do much harm. It is not to be supposed that these 
influential bankers are deliberately trying to get up 
another panic, with all its distressing consequences. 

*'They might well remember, however, that the 
remarks they are reported as having made, might, in a 
certain contingency, prove extremely costly to the 
banks and to the business men of this city. 

"It is not as if there were any important end to be 
gained by such alarming utterances. On the contrary, 
it is highly probable that the urgency of New York 
bankers may go far to prejudice the very cause they 
desire to aid, particularly with some members of the 
Senate from the West and South whose support of the 
repeal bill is essential. Senators of the United States 


ought to be far above mere prejudice against a measure, 
because any worthy body of citizens advocates it with 
peculiar zeal. That some Senators are not is the 
unfortunate fact. The idea that a measure is passion- 
ately desired by New York bankers, in the judgment 
of those who know the Senate best, is apt to damage 
that measure more than it will help it. If bankers of 
this city wish to do their utmost to assist the passage 
of the repeal bill, they may find it wise not to talk ve- 
hemently for publication. 

"It is a less important fact that sound business men 
are not by any means agreed about the necessity of 
action on the silver question at this time. ' ' 

The Tribune proceeds to warn the banks against 
expecting too much from the repeal of the Sherman 
law. It said : — 

"There was such agreement some time ago, before 
the widespread disasters which it was hoped to aver had 
come. But it is not so clear now as it was then sup- 
posed to be that a single act of legislation would unlock 
countless hoards, and bring untold millions hither from 
England, and restore confidence and set all the mills 
at work. Whether all these things would have resulted 
at once is not the question. There have been many 
thousand failures. More than seven hundred banks 
have failed with liabilities amounting to more than 
$170,000,000. A considerable part of the manufactur- 
ing force of the whole country has stopped operations. 
In many ways the conditions have changed. 

"One of the ablest bankers in this city, having charge 
of a very important bank, recently remarked that it 
was no longer clear to him that repeal of the silver act 
would accomplish what he had expected. Its antici- 
pated effect, he said, would have been largely senti- 
mental, but it was no longer possible to restore con- 
fidence entirely and instantly, as he had thought it 
might be restored some months ago. What this banker 
thinks many other sound business men are thinking. 



It does not seem to them wise any longer to hold out 
the idea that all our fortunes in this great country 
must turn upon an event which is not certain to take 
place. The repeal bill is, as we believe, a wise and 
highly desirable measure. But it is hardly wise or 
desirable to stake the future of all business upon the 
action or inaction of the Senate of the United States. ' * 

In the meantime, the New York bankers were hold- 
ing meetings, and formulating plans to compel the 
Senate to act with more haste. 

A New York special to the Washington Post, Sep- 
tember 17th, contained the following remarkable 
language : — 

''New York, September 17 th. 

**In a group of bankers at the Union Club to-day, the 
sentiment was given voice that the delay in the pass- 
age of the repeal bill had reached a point that needed 
explanation. At the Manhattan Club, where the 
Democratic bankers principally gather, almost the 
same idea was expressed, but Senator Voorhees per- 
sonally was held responsible. It was argued that the 
Democratic caucus had done all it could, but that the 
Indiana Senator had not lived up to the confidence 
reposed in him. The same assertion is made more 
bluntly in the open street, and at the Windsor Hotel ; 
the banking men were talking this evening about the 
difficulty of understanding what Voorhees was trying 
to gain by what was considered his too-considerate 
treatment of the silver minority. 

''Practically the same opinions are held by business 
men who have no banking interests. 

"The feeling here is that unless in a day or two 
Voorhees performs without further delay what is con- 
sidered his duty, of pressing for a vote, he must find 
himself under the necessity of explaining what are his 
concealed motives. 'Candidly,' said a banker of 
high standing to the Post correspondent, 'we did not 


expect repeal to have been accomplished by this time, 
but the celerity with which the House passed the bill 
gave us reason to believe like speed would follow 
in the Senate. We know the ways of Senators pretty 
well, and we can understand some of the motives that 
seem to actuate Senator Voorhees. But his refusal to 
come to New York and talk with us has suggested 
wrong motives, and his weak stand against the aggres- 
sion of the silver Senators is more than we can fathom. 
What does it mean? I ask the question because we 
must know. We have a right to know. If we are not 
given satisfactory reasons for the delay, as we have 
not to this hour, we cannot be blamed for believing 
that there is something behind it all. What can be 
Senator Voorhees' personal interest in keeping back 
repeal? That's what we'd like to know; for his polit- 
ical interests are to our minds not enough to explain 
the strange delay. ' 

"This talk of other motives than politics behind the 
delay has gained currency among certain bankers, but 
is rejected as unbelievable by others. * ' 

From the language of these bankers, it will be seen 
that they regarded Congress as a mere servant of the 
money power, and that the Senator, or Representative, 
who would not completely subject himself to their 
beck and call was liable to incur their censure. 

The Clearing House Association of New York City 
transmitted a circular to various members of Congress, 
in which was detailed a financial plan concocted by 
these financiers. It proposed that Congress enact a law 
providing that, whenever the clearing houses of New 
York City, Boston, Chicago, and other great cities, 
decide that the country is in a state of panic, these 
associations could deposit securities with the Govern- 
ment which should put up money for these great 
financial rings. 


This is an example of the arrogant demands of the 
panic breeders, railway wreckers, trust organizers, 
stock, and grain gamblers. 

That these men presumed that the}'- owned the fee 
simple of the United States Government, is evident 
from an interview with a banker, published by a New 
York paper. In substance it is as follows : — 

It was rumored that the President and the Secretary 
of the Treasury had a conference with reference to 
removing the ten per cent, tax on State bank notes. 
A reporter requested the opinion of Mr. Simmons, 
President of a great national bank of New York, 
upon the merits of the proposed measure. Mr. Sim- 
mons replied as follows. He said : — 

"Well, I have not examined the proposition very 
closely, but do not think that I wotild like it. How- 
ever, there need not be any solicitude, because the 
administration will not pass any financial legislation 
without consulting us ; hence there need be no anxiety 
on the part of the public regarding the subject." 

Another banker, on being interviewed by the re- 
porter, stated that no financial bill would pass which did 
not meet the approval of the bankers. 

After a long debate in the Senate, the repeal bill 
was passed October 30, 1893. It was sent back to the 
House for concurrence, as the Senate had added a few 
slight amendments to the House bill. 

After a short debate the House concurred in the 
Senate amendments, and the bill became a law Novem- 
ber I, 1893. 

The effects of the panic, which was created by the 
national banking money power to coerce Congress into 
repealing the purchasing clause of the Sherman law, 
are beyond the descriptive powers of language. 


The New York World, of August, 1893, published a 
list of great railway companies whose bonds declined in 
value from ten to fifty-five per cent. These were gold 

The decline of prices of agricultural products, since 
the repeal of the purchasing clause, was greater than 
ever before known. 

On June i, 1893, wheat sold for 83 cents per bushel. 

On October 31st, it brought 69 cents, a decrease of 
fourteen cents. We quote New York prices. 

The total loss on wheat to the farmers for the year 
1893, was $70,000,000. 

Cotton fell two and one-fourth cents per pound. 

Other agricultural products fell at the same ratio. 

It is safe to state that the loss on agricultural pro- 
ducts, resulting from the repeal of the Sherman law 
in the United States and the closing down of the mints 
of India to the free coinage of silver, amounted to hun- 
dreds of millions of dollars. 

And yet the passage of that Repeal Act was procured 
on the false pretense that prosperity would return to 
bless the people. 

It was further stated that the repeal of the Sherman 
law was necessary to prevent the exportation of gold 
from the United States. This was another hypocritical 
plea to aid in the passage of the repeal, for, in a single 
year after that act was consummated, one hundred and 
twenty millions of dollars in gold were drawn out of 
the Treasury by that set of knaves who had urged re- 
peal as a means to protect the gold reserve. 

The number of failures for the year 1893 loomed up 
to the portentous figures of 15,242, with liabilities of 


The extent of suffering among the working classes 
cannot be estimated, all of which was the direct result 
of the conspiracy organized by the national banking 
money power, and which was executed by its minions 
throughout the length and breadth of this land. 

The New York Tribune estimated the shrinkage of 
value of all kinds of property at ten billions of dollars 
during this panic, which it had urged the bankers to in- 
flict upon the people as an "object-lesson." 

Other competent writers estimate the shrinkage of 
values, in 1893 and 1894, at not less than twenty billions. 

It was lamentable. 



**When the laws undertake to add to these natural and 
just advantages artificial distinctions ; to grant titles, 
gratuities, and exclusive privileges ; to make the rich 
richer and the potent more powerful, the humble 
members of society, the farmers, mechanics, and labor- 
ers, who have neither the time nor the means to secure 
like favors to themselves, have a right to complain of 
the injustice of their Government." — Andrew Jackson. 

During the struggle for the repeal of the purchasing 
clause of the Sherman law, several financial measures 
were introduced in Congress. 

Among these proposed bills was Senate bill 453, to 
permit national banks to issue circulating notes up to 
the par value of the bonds deposited for the security of 
their circulating notes. 

This bill proposed to donate to these banks an addi- 
tional $25,000,000 of currency. 

Senator Cockrell brought forward an amendment, 
by which the holders of United States bonds could 
deposit them with the Secretary of the Treasury, and 
receive therefore an amount of United States legal 
tender notes of the same nature as greenbacks, equal 
to the par value of the bonds so deposited. 

This was applying the principle of bond security for 
these proposed notes. 

The national banks immediately opposed this amend- 
ment, as they readily perceived that this amount of 
money would escape their control. There were many 



individual holders of these bonds who would have 
gladly availed themselves of the opportunity to obtain 
these notes by a deposit of bonds therefor. 

The banks were powerful enough to defeat this 
amendment which would have set afloat many millions 
of legal tender currency. 

The national banks and their allies, the stock gamb- 
lers, were so elated over their success in securing the 
repeal of the purchasing clause, that on December 5, 
1894, they made an effort to force a bill through the 
House to permit railway corporations to form pools, or 
trusts, to maintain high rates of transportation. 

This bill was in charge of Mr. Patterson, an advocate 
of the single gold standard. The measure was so skill- 
fully drawn that it would have placed the entire coun- 
try at the absolute mercy of the railways. 

It was evident that the stock gamblers who attempted 
to railroad this bill through Congress, were actuated 
with the sole purpose of enhancing the value of rail- 
road stocks and bonds, and thus dispose of them on a 
rising market. It was a stock gambling scheme, pure 
and simple. 

Although the iniquity of this bill was thoroughly 
exposed by those who opposed it, the House passed it 
by a decisive vote. It failed to go through the Senate. 
During the great panic which was ravaging the coun- 
try, more than seven hundred banks had failed with 
liabilities of $170,000,000. A great many of these 
failures were national banks, and, in many instances, 
they were precipitated by the conduct of the officers 
and directors squandering the money of depositors in 


To remedy this evil, Mr. Cox, of Tennessee, intro- 
duced House bill 2,344, which read as follows: — 

"That no national banking association shall make 
any loan to its president, its vice-president, its cashier, 
or any of its clerks, tellers, bookkeepers, agents, serv- 
ants, or other persons in its employ until the proposi- 
tion to make such a loan, stating the amount, terms, 
and security offered therefor, shall have been sub- 
mitted in writing by the person desiring the same, to a 
meeting of the board of directors of such banking 
association, or of the executive committee of such 
board, if any, and accepted and approved by a majority 
of those present constituting a quorum." 

The provisions of this bill would impose a most sal- 
utary check upon those officers and directors of national 
banks who endeavored to use the money of their de- 
positors in stock gambling and grain speculations. 

This bill had been before the House for some time, 
and Mr. Eckels, Comptroller of the Currency, opposed 
its passage in the following language : — 

''It would be unwise to forbid an association to loan 
or to discount for its several directors, as they are 
usually selected from among the leading men of the 
various branches of business, for the reason that they 
possess information of great value in passing upon 
paper offered by those in some line of trade with them- 
selves. ' ' 

This remarkable language of the Comptroller, in a 
measure, corroborates the statement, that the officers 
and directors of national banks consisted chiefly of the 
great speculators, stock gamblers, railway magnates, 
organizers of trusts, and those who monopolize the 
various lines of business. 

On October 16, 1893, this bill was called up by Mr. 
Cox, and immediately every national banker in Con- 


gress, as well as those stock gambling members, op- 
posed its passage. Among those who vehemently 
attacked this measure were Mr. Lockwood, of New 
York, Mr. Cannon, a banker of Illinois, and Mr. Bing- 
ham, of Pennsylvania. 

The following debate took place between Mr. Cox 
and Mr. Bingham : — 

Mr. Bingham: Will the gentleman permit an in- 

Mr. Cox: With pleasure. 

Mr. Bingham: What paragraph of this bill in- 
cludes directors? 

Mr. Cox: I think the original language of the bill 
included them, but they are now included by amend- 

Mr. Bingham: Now, I want to put this practical 
proposition to the gentleman 

Mr. Cox: That is right. That is the kind of ques- 
tion I like. 

Mr. Bingham: I am a director of a bank 

Mr. Cox: So was I, until sent here. 

Mr. Bingham : I do not say that I am personally ; 
but I am simply putting my proposition in that way. 

Mr. Cox : Well, I was a director of a bank. 

Mr. Bingham: I am a director of a bank and I am 
also a stockbroker, doing a large stockbroking business. 
The market is an active market. At i or 2 o'clock in 
the day my customers come in and buy large amounts 
of stocks and sell large amounts of stocks. Between 2 
and half- past 2 o'clock I have to take the securities that 
I have bought for my customers on a margin (the uni- 
versal way of doing such business) and go to the banks 
and borrow $100,000, $200,000, $300,000, often larger 
amounts, for which I give the best gilt-edged collateral 
in the market. Now, how am I to do that business 
if I have to wait for a quorum. Three o'clock comes 
and if I have not placed my stock and secured my cus- 


tomers and covered my margins, what am I to do? I 
put that to the gentlemen as a business proposition. 

Mr. Doolittle: Stop stock gambling. [Laughter.] 

Mr. Bingham: Oh, it is not stock gambling. I 
have described a very ordinary transaction in New 
York, or Philadelphia, or Chicago, or any of the other 
large cities where such transactions often cover mil- 
lions of dollars. 

Mr. Cox: I am aware of that. But what ought 
that man to do, that broker who wanted the money, 
and what ought the cashier to do in a good, solvent, 
well-regulated bank? When the broker comes and 
makes his application for a loan to meet the transac- 
tions of the day, they ought to get the executive board 
together; and I never saw a bank in my life, even in 
the rural districts, where you could not get an executive 
board of two members together. 

Mr. Bingham: You cannot do it in the great cities. 

Mr. Cox: Why not? 

Mr. Bingham: Because the men are engaged in 
their regular vocations. A directorship in a bank is 
not a paying employment. 

Mr. Cox: Is not banking a vocation? 

Mr. Bingham: A director is paid no salary. 

Mr. Cox: He gets his salary in the way of divi- 
dends and profits. 

Mr. Bingham: That is the interest upon his mone}' 

Mr. Cox : Can you tell me of any case where they 
could not get two members of the board together? 

Mr. Bingham: I say they do not do it. 

Mr. Cox: Oh, I know they do not do it; but could 
they not do it? 

This extract from the Congressional Records bears 
out the charge, so often made, that the leading stock 
gamblers are officers and directors of national banks, 
and that they use their official position, as such officers, 
to obtain control of the bank funds to gamble in stocks. 

Mr. Bingham is an example of that class of men who 


represent Eastern constituencies in the halls of Con- 

We quote further from this interesting debate : — 

Mr. Lockwood: Why do you want to legislate 
against these individual men? 

Mr. Hall, of Missouri: I will answer it. For the 
very reason that it has a tendency to prevent these men 
from robbing the banks, the very thing the Comp- 
troller of the Currency, not only this one but every 
other one, has tried to prevent. 

Mr. Lockwood : Right there I want to correct you. 
The present Comptroller of the Currency has never 
sanctioned this bill. On the contrary, my information 
is that he disapproves of this bill. And I will say fur- 
ther, that he ought not to commend any such bill as 
this. Now, I beg to complete my statement without 
being interrupted. I say this further, that by the 
passage of this bill 

Mr. Cox: Will you yield to me for one moment? 

Mr. Lockwood: Yes. 

Mr. Cox : I gave you the floor yesterday. 

Mr. Lockwood: Certainly. 

Mr. Cox: Let me ask you this. You stated that 
your President and your cashier are members of your 
Finance Committee, or your Executive Committee : the 
name is not important. 

Mr. Lockwood: Yes. 

Mr. Cox: Now, then, the paper is submitted to 
them, as you stated to the House a moment ago. 

Mr. Lockwood: Yes. 

Mr. Cox: Do you mean that that paper is dis- 
counted without consultation with the directors? 
Now, tell me what objection there is to that Executive 
or Financial Committee reporting it back to the board 
of directors and making a record on their minutes? 

Mr. Lockwood: My dear sir, what would be the 
use of, after it had been discounted, their reporting it 
back, when they will not have a chance, perhaps, to 


report it back to the board of directors for one or two 
months after the money has been borrowed? It would 
be of no benefit or information to the board of direct- 
ors. Any member of the board of directors can look 
at the discount ledgers and see at any time what is 
going on and what discounts there are recorded in that 

Mr. Cox : Do you mean to say that your directors 
do not meet in less than two or three months? 

Mr. Lockwood: I state with great frankness that 
in many of these large banks, the board of directors do 
not meet more than once a month or two months, and 
there is no law requiring them to meet at any specific 
time, except twice each year. 

Mr. Dunphy : But they are at the bank every day. 

Mr. Lockwood: Furthermore, if this bill is passed, 
it will cause many of the most active, upright, and 
business-like men of the country to refuse to act either 
as officers or directors of national banks. All will 
concede that a national bank, to be successful, must 
have for its stockholders, directors, and officers, active, 
wide-awake business men. The stockholders select the 
directors, and the directors in turn select the officers 
of the bank, the most competent and trustworthy men 
they can find. All understand full well that the value 
of their stock and the success of the bank depends upon 
the confidence of the people in the judgment and wis- 
dom shown in the selection of the officers and directors 
of the bank. 

According to the opinion of Mr. Lockwood, thus pub- 
licly expressed in this debate. Comptroller Eckels was 
on very friendly terms with the national banks, for, 
assuming the word of this prominent supporter of the 
administration to be true, the Comptroller was opposed 
to any restriction that could be thrown in the way of 
those bank officials who did not hesitate to gamble in 
stocks and bonds with the money of depositors. 


It was, however, the generally expressed opinion of 
the press, and of many public men, that had Comp- 
troller Eckels exercised as much diligence in keeping 
the national banks within the letter and spirit of the 
law, as in attending their banquets, where he showered 
fulsome eulogies upon the national banking system, it 
would have conduced much to the public welfare. 
Following in the footsteps of all his predecessors in that 
office, Mr. Eckels has graduated from the Comptroller- 
ship of the Currency to the head of a great national 

Another inference to be drawn from Mr. Lockwood's 
statements is, that the most upright men in the busi- 
ness communities in which these banks are situated, 
would not consent to act as directors unless they had 
free access to the money of depositors. The bill was 

On October 23, 1893, House bill No. 139, known as 
the Torrey Bill, was brought forward in the House. 
The purpose of this measure was the creation of a 
uniform system of bankruptcy throughout the United 

The passage of this bill would be class legislation of 
the worst character, as, under its stringent provisions, 
any merchant who was unable to pay a debt within 
thirty days after it was due, could be forced into United 
States courts as a bankrupt. This was the darling 
scheme of the wholesale associations of the United 
States, and one at which they had labored unceasingly 
to force through Congress. 

The power which was behind this bill, and which 
was urging its passage through Congress, was that 


gigantic trust — the wholesale dealers' associations of 
the United States. 

The measure failed to pass, notwithstanding the 
prodigious efforts of the lobbyists to push it through 
that body. 

During the month of February, 1894, a bill was 
introduced in the House to coin the seigniorage ly- 
ing in the Treasury. This seigniorage was the gain 
between the bullion value and that of the coinage value 
of the silver, purchased under the Sherman law. It 
passed the House March i, 1894, by a vote of 168 yeas 
to 129 nays. It then went to the Senate, where, on 
March 15th, it passed by a vote of 44 yeas to 31 nays. 
The bill was disapproved by President Cleveland, and 
the House failed to pass it over his veto by the neces- 
sary two-thirds vote. 

During this time, gold coin was offered in exchange 
for silver dollars, and the action of President Cleve- 
land in vetoing the bill is seemingly unaccountable. 

The passage of this measure would have added $55,- 
156,681 to the circulating medium of the country. 

In October, 1894, the National Bankers' Association 
met at Baltimore. During this meeting Hon. J. C. 
Hendrix, of whom mention has been made in these 
pages, delivered a speech, in the course of which he 
thus sneeringly referred to Congress: — 

**Men who never had a discount in their lives, and 
would not be entitled to one ; whose highest occupa- 
tion has been sitting on a barrel at a comer grocer}^ 
whittling a piece of wood ; others who have followed the 
plow all day in the hot sun and tried to settle, by the 
rule of thumb, questions of political economy, over 
which men of scientific attainments have studied and 


grown gray — such men come or send their like to the 
halls of Congress, and they want to dictate the finan- 
cial policy of the country. ' ' 

This sarcastic allusion to members of Congress was 
cheered to the echo by the hundreds of national bank- 
ers present during its delivery. 

This cuckoo national bank member of Congress, who 
spoke so derisively of his fellow legislators, had been, 
prior to his election to that body, a citizen of Missouri, 
and from thence had migrated East. He was appointed 
postmaster of Brooklyn during the first administration 
of President Cleveland, and after his term of office had 
expired, became President of a national bank. He was 
elected to Congress, where his labors in behalf of banks 
were indefatigable. 

It was during this bankers' convention that Charles 
C. Homer, President of a national bank of Baltimore, 
brought forward what is known as the Baltimore plan 
of banking, a scheme which met the approbation of 
the associated banks. 

This plan proposed that all paper money should be 
issued through the medium of the national banks, and 
that the redemption of all such bank notes should be 
guaranteed by the Government. 

In the meantime, the banking monopoly was forming 
plans to seize upon, and to appropriate to itself, the com- 
plete and absolute issue and control of the currency 

These deeply-laid schemes did not coincide in every 
particular, but they all concurred in the principle that 
the banks should issue bank notes to circulate as money, 
and that the Government should burden itself with the 
responsibility of finally redeeming all such notes 
eventually in gold. 


The banks of issue, however, were to be the sole 
beneficiaries of each and every system so proposed. 

President Cleveland aligned himself in behalf of 
these demands of the banks. 

This man who persistently exhibited the supposed 
dangers of a ' fiat money," and who wanted the "best 
money of the world" as a medium of exchange, was 
really a fiatist of the most extreme type. 

He concentrated all his energies and influence to the 
end that the banks might grasp the fiat of the nation 
for their profit. 

He was a national bank fiatist. 

On December 3, 1894, Congress convened in general 
session, and President Cleveland transmitted his mes- 
sage to that body. 

In the course of this document, he stated that the 
Secretary of the Treasury had prepared a bill provid- 
ing for an elastic bank currency. 

The President said: — 

"Questions relating to our banks and currency are 
closely connected with the subject just referred to, and 
they also present some unsatisfactory features. Prom- 
inent among them are the lack of elasticity in our cur- 
rency circulation, and its frequent concentration in 
financial centers when it is most needed in other parts 
of the country. 

"The absolute divorcement of the Government from 
the business of banking is the ideal relationship of the 
Government to the circulation of the currency of the 

"This condition cannot be immediately reached; but 
as a step in that direction and as a means of securing 
a more elastic currency and obviating other objections 
to the present arrangement of bank circulation, the 
Secretary of the Treasury presents, in his report, a 



scheme modifying present banking laws and providing 
for the issue of circulating notes by State banks, free 
from taxation under certain limitations. 

*'The Secretary explains his plan so plainly, and its 
advantages are developed by him with such remarkable 
clearness, that any effort on my part to present argu- 
ment in its support would be superfluous. I shall 
therefore content myself with an unqualified endorse- 
ment of the Secretary's proposed changes in the law, 
and a brief and imperfect statement of their prominent 

"It is proposed to repeal all laws providing for the 
deposit of United States bonds as security for circula- 
tion ; to permit national banks to issue circulating notes 
not exceeding in amount 75 per cent, of their paid-up 
and unimpaired capital, provided they deposit with the 
Government, as a guarantee fund, in United States 
legal tender notes, including treasury notes of 1890, a 
sum equal in amount to 30 per cent, of the notes they 
desire to issue, this deposit to be maintained at all 
times, but whenever any bank retires any part of its 
circulation, a proportional part of its guarantee fund 
shall be returned to it ; to permit the Secretary of the 
Treasury to prepare and keep on hand ready for issue 
in case an increase in circulation is desired, blank 
national bank notes for each bank having circulation, 
and to repeal the provisions of the present law impos- 
ing limitations and restrictions upon banks desiring to 
reduce or increase their circulation — thus permitting 
such increase or reduction within the limit of 75 per 
cent, of capital to be quickly made as emergencies 

This scheme outlined in the message of President 
Cleveland was one of the most remarkable plans of 
banking ever proposed by the wit of man. It aimed 
to drive out of circulation every greenback and treas- 
ury note, and to totally eliminate silver by an abundant 
supply of bank notes. Under the false and delusive cry 


of *'The absolute divorcement of the Government from 
the business of banking, " the President sought to throw 
the business of government into the hands of the 

These recommendations of the President demon- 
strated that he was as fanatical in his belief in the 
efficacy of a banking monopoly and aristocracy as John 

He gave official notice that the demands of the bank- 
ing interest should be granted if he could be success- 
ful in swinging Congress into line with his policy. 

In a speech of great ability, Hon. Henry W. Coffeen, 
of Wyoming, referred to these various schemes of 
banking as follows. He said: — 


*'One is to give more power to the banks by issuing 
to them a greater amount of currency without com- 
pensation — that is, by issuing to them not only 90 per 
cent, on their deposits of United States bonds at a 
charge of i per cent, per year, but to furnish them 100 
per cent, or possibly 114 per cent, while the Govern- 
ment bonds stand at 14 per cent, premium, and release 
them also from paying even i per cent, tax or interest 
on this currency furnished thus to the banks, and, as 
in all of these bank plans, it provides for the issuance 
of more bonds payable in gold. 

"other bonds FOR SECURITY. 

"Another is to allow banks to deposit other than 
United States bonds for security, and yet make the 
Government liable for ultimate redemption of all the 
bank notes and issue gold bonds in place of the green- 


"Another plan is to allow banks to have a national 
form of currency printed for them that may be issued 
and loaned out as notes of the banks based nominally 


on bank assets, but the Government to guarantee ulti- 
mate redemption. This is the Baltimore or bankers' 
own plan. 


"Another is to practically turn the entire responsi- 
bility of supplying currency over to both State and 
national banks under a sort of supervisory provision 
upon deposit of a 5 per cent, and 30 per cent, fund in 
legal tenders; but relieving the Government entirely 
from all responsibility of final redemption of circula- 
ting bank notes, 

"eckels plan. 

"Another is to take 50 per cent, of assets of the 
bank on which to determine amount of note issues 
allowed to the banks, and an additional amount may 
be allowed them under heavy Government charge or 
taxation as an emergency currency." 

His summary of the results of these various systems 
that were urged on Congress is a masterpiece. He 
said : — 

"what these and other bank plans involve. 

"All of these plans involve the following:— 

"i. The banks to control the volume of currency. 

"2. The banks to secure all the profits on currency. 

"3. The banks to be allowed to exercise the prin- 
ciple called elasticity, another name for sudden con- 
traction or expansion, as their own profits may dictate, 
without public notice and without regard to the rights 
or needs of the people generally. 

"4. The banks to protect one another as note hold- 
ers (for they are the principal holders of bank notes 
under the deposit system of our country), while depos- 
itors are left completely unprotected. 

"5. The banks to have to themselves and all creditor 
classes, all the benefits of a highly appreciated gold- 
standard money, possessing double the purchasing 
power that money should have in exchange for all 
other property, while the burden of maintaining the 


gold redemption for a time and the dishonor of an 
ultimate and certain breakdown will fall on the Gov- 

*'6. The banks to have all and unrestricted opportu- 
nity for pooling their interests and to have all limita- 
tions that are disagreeable to them removed, under the 
pretense of removing obstructions to elasticity. 

"7. The banks and money dealers to have the most 
absolute and fully legalized control over the prices 
and values of all property, all profits, all industries, all 
equities of contract, and through these channels they 
will have the most complete control over all political 
power and governmental administration that the world 
has ever seen in any age or clime. 

*'8. If there is anything else in sight that Congress 
can give them, they will, as humble conservators of 
financial integrity and wisdom and as saviors of the 
country in its time of need, accept that also. " 

This admirable analysis of the variously proposed 
schemes of the banks was made by one of the ablest 
members of Congress. 

Mr. Coffeen was not only a practical banker but a 
very learned student of political economy. 

The most important and distinguishing feature 
between the plans of banking enumerated in his sum- 
mary and that of the Bank of England is most vital. 

In all the plans put forward by the bank monopolists, 
the Government would be the sole redeemer of the 
bank notes that would be issued by them. 

Under the charter of the Bank of England, the 
latter was compelled to redeem its own notes in gold. 
Reaping the profit, it bore the burden of redemption. 

The national banking power of the United States, 
it will be seen, was far more voracious in its greed 
than that of England. 


In pursuance to the recommendation of the Presi- 
dent, the currency problem was taken up by the 
House at once, and on December lo, 1894, the Com- 
mittee on Banking and Currency began a series of 
hearings upon this question. 

Secretary Carlisle presented his plan to the commit- 
tee, and he was followed by Comptroller Eckels. 

A number of leading bankers also appeared before 
this committee and gave their views upon this subject. 

During the hearings before the committee, Mr. St. 
John, President of the Mercantile National Bank of 
New York City, appeared before that body, and the 
following question was propounded to him by Mr. 

"Are you opposed to the use of the greenbacks? If 
so, state why; and if you are not, state why not." 

To which question Mr. St. John made the following 
reply : — 

'*I am opposed to asking any sacrifice of the people 
at large in order to provide profit to banks. I do not 
dare ask any such thing. I never did and I never 
will. I would not so sacrifice the popularity that the 
national banks of the United States have legitimately 
earned. The great popularity to which they are enti- 
tled is being sacrificed by well-meaning doctrinaires, 
outsiders, who know little about banking. Think of 
it, the United States issues $100,000,000 of bonds, on 
which interest is to be paid for ten years at 5 per cent, 
per annum. At the same time it is proposed that 
$346,000,000 greenbacks, a debt which does not bear 
interest, and therefore is saving (at 5 per cent, per 
annum) $17,300,000 a year to the people at large, shall 
be retired. More interest-bearing debt to issue to 
retire them. And as a feature of the proposal is that 
bank notes, yielding profit to banks as the first essen- 


tial of their existence, shall supersede them! It is 

Of all the financiers who appeared before this com- 
mittee to give their views, Mr. St. John was the sole 
banker who opposed the retirement of the greenbacks, 
the issue of bonds, and an enlargement of the powers 
of the national banks. 

By a vote of 9 to 8, the committee adopted the plan 
of Secretary Carlisle, and decided to report it to the 
House without any change, with a recommendation that 
four days be allowed for debate, and then a vote be 
taken on the bill. 

The bill was reported to the House, December 17th, 
and a spirited debate at once sprung up regarding the 
merits of the Carlisle plan. 

The main features of this plan of banking proposed 
that national and other banks could issue circulating 
notes up to seventy-five per cent, of their paid-up cap- 
ital. These notes were to be secured by a guarantee 
fund, consisting of treasury notes, including notes 
issued under the act of July 14, 1890, equal to thirty 
per cent, of the circulating notes applied for by the 
banks. Thus, a bank by depositing $30,000 of green- 
backs, or treasury notes, with the Secretary of the 
Treasury, would receive $100,000 in bank notes — a 
clear gratuity of $70,000 of loanable capital. 

At this time, there were in circulation greenbacks 
and treasury notes to the amount of $498,287,283. 
The treasury notes and greenbacks were locked up in 
the vaults of the banks, and, therefore, by depositing 
this currency with the Treasury, as a guaranty fund, 
the banks would have been entitled to receive $1,660,- 
000,000, which could have been loaned out by them, 


netting them an annual income exceeding $100,000,000, 
being a profit of twenty per cent, upon the greenbacks 
and treasury notes so deposited by them. 

This plan provided for a safety fund, whose maxi- 
mum should be five per cent, upon the total amount of 
national bank notes so outstanding. This safety fund 
was to be raised by a small semi-annual tax upon 
the circulating notes of the banks. 

The redemption of these notes would rest upon the 
Treasury of the United States. 

One section of bill proposed to repeal section 9 
of the act of July 12, 1882, renewing the charters of 
the national banks, which section prohibited those 
banks from surrendering more than $3,000,000 of their 
circulating notes per month. 

This section of the act of 1882, which took away 
from the banks the absolute power of suddenly pros- 
trating business by contracting the volume of money, 
was engrafted on that act by the energy and eloquence 
of Mr. Carlisle. 

It was during the debate on this section of the Crapo 
resolution that he electrified the House and the coun- 
try by that marvelous logic, which placed him in the 
forefront of those who antagonized the national bank- 
ing power. 

He now proposed to reverse his former position, by 
placing the great power of expanding and contracting 
the volume of money in the hands of the banks. 

Who can tell what influence prompted Secretary 
Carlisle to burn all the bridges behind him in this 
remarkable change of front since 1882? 

Such was the iniquitous scheme suggested by Presi- 
dent Cleveland, put into the form of a bill by Secretary 


Carlisle, and coached in the House of Representatives 
by Mr. Springer, of Illinois. 

This measure was shrewdly designed to still the 
demand for free coinage of silver by the substitution 
of a bank currency therefor. 

The Western and Southern members of Congress 
immediately perceived the intent and scope of this 
bill, while the advocates of the national banks asserted 
that the adoption of the Carlisle bill, or the Baltimore 
plan, would be the ' ' death knell of silver. ' ' 

The New York Evening Post, December 19th, 
said : — 

"Whatever may be the fate of the Carlisle bill, the 
movement for currency reform through better banking 
methods will go on, and it will draw more and more of 
Mr. Bland's cohorts. Already the newspapers of the 
mining States have taken the alarm. Some of them 
say that either the Carlisle bill or the Baltimore plan, 
if adopted, will be the 'death knell of silver.' Yes, 
gentlemen, the death knell of silver, in the sense that 
you mean, is already sounded. It was sounded when 
the attention of the public was drawn to a cheaper and 
speedier way of supplying the public with the instru- 
ments of exchange needed to transact their daily 
business. ' * 

The opponents of national banks and the single 
standard of gold knew, as well as the New York Even- 
ing Post, that the Carlisle bill was intended to sound 
the ** death knell of silver." 

Therefore on December 19th, Mr. Bland proposed to 
substitute a bill providing for the free coinage of silver. 

Those members of Congress, who were urging the 
passage of the Carlisle bill, saw that there was no pos- 
sibility of its passage by the House, and, therefore, the 


bill was withdrawn and a substitute brought in by Mr. 
Springer. This proposed substitute more nearly fol- 
lowed the Baltimore plan. 

The substitute measure also met the approbation of 
Mr. Carlisle. The most dangerous feature of this 
substitute also repealed the ninth section of the joint 
resolution of 1882, which took away from the national 
banks the power to contract their circulating notes in 
any sum exceeding $3,000,000 per month. 

It must be borne in mind, that it was through the 
powerful logic and eloquence of Mr. Carlisle that the 
power of suddenly contracting and expanding the 
national bank currency was taken away from the 
banks in 1882. 

Yet such was the apostasy of this man to his former 
principles, that he now stood forth boldly and he un- 
reservedly advocated a system that would give banks 
of issue the unlimited power to contract and expand 
the volume of money at their own unrestrained will, 
and thus place all industry and all property at the com- 
plete mercy of those financiers, who had repeatedly 
attacked the government credit, brought on every 
panic, and violated the laws of the country. 

Mr. Springer, who had introduced the Carlisle bill, 
and who also brought in this substitute, had served in 
the House of Representatives for twenty years, during 
which time he had signalized his public career as a 
sturdy and consistent advocate of the free coinage of 
silver, and had always opposed the aggressions of the 
national banking monopoly. 

We now ascertain that his conversion to the Tory 
system of finance was as sudden as that of Saul of Tar- 


sus when he renounced the Jewish faith to accept the 
doctrines of Christianity. There the parallel ends. 

Mr. Springer became the accredited agent of the 
administration in its efforts to force this banking bill 
through Congress. 

The Washington Evening Star of January 4, 1895, 
described his tactics in the following language. It 
said : — 

*'His plan of canvass is to have one man of each 
delegation sound the sentiment of his colleagues. If 
this canvass is not satisfactory, he will probably still 
further postpone a caucus, so as to give an opportunity 
for administration influence to be brought to bear 
upon those members, who are ascertained to be not set 
in their purposes as to the measure. ' ' 

Mr. Springer's efforts to ascertain the views of the 
House on this bill were anything but encouraging, 
and hence the administration repeated those tactics 
which were so influential in securing the repeal of the 
purchasing clause of the Sherman law. 

Again the seductive power of patronage was brought 
into requisition to such a degree as to anger many of 
the members of the House. 

Moreover, the veto of the seigniorage bill was won- 
derfully effective in opening the eyes of those Repre- 
sentatives who had voted for the repeal of the pur- 
chasing clause, and they saw the pit which the admin- 
istration had dug for them. 

This attempt of the administration to influence the 
House aroused the latent manhood of its members, 
and this undemocratic policy of President Cleveland 
received some well deserved rebukes from those mem- 
bers of the House, who had once been reckoned among 
the staunchest admirers of the President. 


On January 8, 1895, that noble tribune of Democ- 
racy, Hon. J. C. Sibley, boldly assailed the coercive 
measures of the administration for its attempts to 
push this bill through under whip and spur, and the 
speaker incidentally exposed the dastardly means by 
which the repeal of the purchasing clause was secured 
in August, 1893. Mr. Sibley said: — 

"Have Americans become so spiritless that they 
have no rebuke for the imperiousness of a would-be 
autocrat? No answer to the attempted usurpation of 
legislative rights? Do men tell me that the power of 
the administration was not used to force the repeal of 
the Sherman bill? Why, Mr. Chairman, there are 
members of this House who told me with their own 
lips that they were against the repeal of this bill, and 
four days afterward they came forward and voted for 
it, and when a few months afterward I asked them 
why, they told me that their banks asked it and that 
they had been promised positions for constituents if 
they supported the repeal! Are the offices, are the 
positions of trust of the country to be bestowed upon 
those persons, and those persons only, who support 
the will of the Chief Magistrate?" 

Mr. Coombs: The gentleman from Pennsylvania 
makes a broad assertion against the administration. 
Now, is he willing to give the names of any members 
in relation to that statement? 

Mr. Sibley: I will say to the gentleman from 
New York that I went two or three days ago and asked 
a member for the privilege of making the statement to 
which I have just referred when the matter came up 
for consideration in the House, and he said, 'Mr. Sib- 
ley, it would place me in a very bad position with my 
constituents, and I am unwilling to do it. ' 

A Member : I should think it would. 

Mr. Coombs: I ask you if you think it fair to 
make so broad a charge against the administration of 


helping to bribe a member of the House, without 
being willing to give the name? In all fairness it is 
only right, as you have made the statement, to give 
the name of the party. 

Mr. Sibley: Mr. Chairman, on the question of 
fairness and honor, I shall leave each man to be the 
judge for himself. The gentleman from New York 
must permit me to exercise that privilege. I am 
attempting to express my own opinion and endeavor- 
ing to show the influences which have prompted 
certain action in this House, and I have no hesitancy 
in saying that if you take the golden padlock off the 
lips of the members of this body, two out of three 
men in this House, I believe, would corroborate my 
statement, at least as to the justice of it — 

Mr. Coombs: But the gentleman makes a state- 
ment which gives a right to eveiy member on this 
floor to ask that he shall name the man. 

Mr. Sibley (continuing) : That Executive influence 
shall not be used. Mr. Chairman, I am going to 
*talk out' this time. I am not going to be silent any 
longer. I have had a padlock on my lips as long as I 
propose to wear it. Why, you remember when old 
Dionysius — 

Mr. Outhwaite: What was it put the padlock on 
your lips? [Laughter.] 

Mr. Sibley : Because, sir, I did not want to rebuke 
an administration that I hoped, before the close of the 
year 1894, would see the error of its ways and keep 
with the American people the pledges which had been 
made by the Democratic party. [Applause.] 

Mr. Outhwaite: But what was it put the padlock 
on your lips? 

Mr. Sibley. When Dionysius, the tyrant of Syra- 
cuse — 

Mr. Outhwaite: Was it Dionysius that put the 
padlock on your lips? 

Mr. Sibley: Mr. Chairman, if I had an hour's 
time with my friend from Ohio I would like to have 


it out with him. I want to tell him that I am not 
talking here for the benefit of men who would rather 
ride to hell in a handcart than to walk to heaven sup- 
ported by the staff of honest industry, as it has been 
said. [Laughter.] I am not talking for the benefit 
of those people who place more value upon a bobtail 
flush than they do upon a contrite heart. [Laughter.] 

Representatives Coombs and Outhwaite, who had 
interrupted the speech of Mr. Sibley, were two of the 
most prominent cuckoos of the House. The last 
named member was well taken care of by the adminis- 
tration, by receiving an appointment as a member on 
the Ordinance Board, at a salary of $8,000 per annum. 

During the time the Springer bill was up for consid- 
eration before the House, an amendment was offered 
to section 4 in the following language : — 

''Section 4. That from and after July i, 1895, ten 
per cent, of the cash reserve required by law shall be 
kept in coin or coin certificates, and not less than one 
half of such coin or coin certificates vShall be in gold 
coin or gold certificates, and that such cash reserve 
required by law shall be kept in coin or coin certifi- 
cates in amounts increased by ten per cent, of the 
whole cash reserve required to be kept by law, on and 
after the first day of each quarter of the calendar year, 
until the whole cash reserve shall be in coin or coin 
certificates ; and not less than one half of such cash 
reserve shall be at all times in gold coin or gold 
certificates. ' ' 

The object ot this amendment to the Springer bill 
sought to compel the banks to maintain a reserve of 
gold and silver coin, and thus bear the burden of 
redemption which had heretofore been borne by the 
Government. The proposed reserve of gold and silver 
coin was designed as a substitute to take the place of 


the lawful money reserve, required by law to be kept 
by the banks. 

It was from the bank reserves of lawful money that 
these institutions furnished the greenbacks and treas- 
ury notes to raid the gold reserve. 

On February 6, 1895, this amendment was sharply 
attacked by Mr. Hendrix, on the ground that it would 
create a new demand for gold, and therefore would 
start a fresh raid upon the Treasury. This statement 
of Mr. Hendrix was made after Mr. Springer had 
stated that the national banks, on the 2d of October, 
1894, held gold coin to the amount of $175,000,000, 
and that besides this amount of gold coin, these banks 
held $185,000,000 in legal tender notes. 

From the debate upon this amendment we quote as 
follows : — 

Mr. Hendrix: Mr. Chairman, I rise to oppose 
this amendment, because it is impracticable and 
unintelligent. It seeks to defeat the very purpose for 
which this legislation is presented to the House. You 
propose to attempt to stop the raid upon the Treasury 
for gold, and you turn around and compel 4,000 
national banks of this country to immediately start a 
fresh raid upon the Treasury for the purpose of getting 
gold to comply with this law. Now, the banks are 
already charged with hoarding too much gold. We 
are doing our best to try to undo the tendency which 
is abroad to hoard the precious metal. You pass this 
clause of the bill and it becomes mandatory where it is 
now simply a matter of commercial option. You 
would compel the banks to send to the nine sub-treas- 
uries with their treasury notes, and to the one sub- 
treasury at San Francisco and the one at New York 
with their United States legal tender notes to get 
gold coin. 

**I want to call the attention of the gentleman from 


Massachusetts (Mr. Walker) to something that will 
impress him at once. You have already provided in 
section 4 of this bill that all silver certificates now 
outstanding shall, when received in the Treasury of 
the United States, be retired and canceled, and silver 
certificates in denominations less than $10 shall be 
issued in their stead. I will ask the gentleman how 
he expects a bank in the city of Boston, or in the city 
of Worcester, to say nothing of the banks in New 
York, to settle their balances at the clearing houses on 
the days of heavy exchanges when they are drawn 
upon, as they frequently are, for $4,000,000 or $5,000, - 
000, in silver certificates, if they are of denominations 
of less than $10? Why, sir, we would all have to go 
to the clearing house in a coach and four in order to 
settle under the operation of this clause." 

Mr. Livingston: With all the other paper of 
larger denominations than $10, why should there be 
any difficulty? 

Mr. Hendrix: But you propose by this bill to 
retire the other paper money. 

Mr. Livingston: Not at all. 

Mr. Hendrix: That is the essence of the propo- 
sition. Instead of letting the banks hold on to the 
greenback certificates, which they have now, and keep 
them in their reserve, you are going to destroy the 
value of those certificates as reserve money, and com- 
pel the banks to substitute for them one of two things, 
silver or gold. Now, if you were a banker, which 
would you choose? Every banker in the country, 
when obliged to make the choice, will choose the one 
that is the more precious in his opinion. 

Mr. Livingston: The gentleman forgets that the 
same section provides for the national banks issuing 
nothing less than ten dollar notes. 

Mr. Hendrix : That is all right, but national banks 
cannot keep national bank notes as a reserve. A 
national bank is not authorized to count national bank 
notes as reserve. The point is that you destroy the 


practicability of making settlements at the clearing 
houses. A man comes in and wants legal tender, and 
under this clause you will have to cart him out a lot 
of silver or gold. Then he has to get a vehicle to 
take it to the place where he is to pay his legal tender. 
If you are going to destroy the value of the gold cer- 
tificates as a reserve and compel the banks to keep gold, 
you are simply imposing a great burden upon them and 
upon the public in the transaction of their business. It 
is impossible to settle the clearing house balances in that 
way. The clearing house in New York has provided 
for the difficulty by issuing gold clearing house certifi- 
cates, based upon coin, placed in the vaults by the 
Clearing House Committee ; but this bill would destroy 
the use of those certificates as a part of the reserve, 
and would compel the banks to keep their reserve in 
the two coins or in the Government certificates there- 
for. It is simply impracticable to carry out this plan 
in the ordinary transaction of the banking business. 
The banks now are showing too great a tendency to 
hoard up gold, and I do not want to see anything put 
in this bill that is going to sequestrate gold. I want 
it made so free that the great deposit in the United 
States of America of the yellow metal will not be in 
the banks, but by the reason of the operation of this 
law, will be transferred to the Treasury of the United 
States, so that the public statements of the Treasury 
will give notice to the whole world that we have lots 
of gold, that we are on a gold basis, and that we are 
going to remain there. [Applause.] 

Mr. Walker: Mr. Chairman, in the first place, as 
to the clearing house certificates, they are exactly 
what the clearing house chooses to make them, as to 
form and substance. 

Mr. Hendrix : Mr. Chairman, I am surprised that 
a gentleman who has stood upon this floor as the 
great commercial apostle, should make such a state- 

Mr. Walker: I want to state to the gentleman 



that the clearing houses of New York and in other 
cities, can make the clearing house certificates just what 
they choose; therefore we need not bother about 
them. They are not within the law ; they are outside 
of it, and their certificates are entirely within the con- 
trol of the clearing houses. 

*'Now the banks have got $175,000,000 in gold to- 
day, and if gold goes to a premium the banks will 
get the premium on it, and the gentleman from New 
York knows, and everybody else knows, that that is 
why they are hoarding the gold. But if we compel 
them by law to hold the gold as a part of their 
reserve, we destroy the interest the bad bankers have 
in putting gold to a premium. Is not that so? 
[Cries of **Yes, yes," and laughter.] 

"You have one silver man here, the gentleman from 
Montana (Mr. Hartman), offering an amendment to 
cut out half of the use of silver at the custom house, 
and you have had another man, an enemy of silver, 
though he thinks himself its friend, trying to prevent 
it from being used in denominations above $10. Now, 
I stand here as a true friend of silver. [Laughter.] 
The gentleman from New York (Mr. Hendrix) stands 
here as a banker. 

"Mr. Chairman, the bankers, not one of them in 
the whole country, from Maine to Georgia, from the 
Atlantic to the Pacific, has offered a single suggestion 
in a practical bill to relieve the Treasury. They have 
all been for banks. They meet at Baltimore ; they meet 
at Boston; they pass resolutions adopting proposed 
amendments to the law to increase their own profits, 
and they tell us on the floor of this House that it is 
none of their business what becomes of the Treasury 
of the United States. They have got $175,000,000 of 
gold. They will hold on to it as long as they can, and 
when it goes to a premium they will get the premium 
upon it. Now, I want a law to compel them to use that 
gold to redeem their own notes over their own counter, 
and thus relieve the United States Treasury, and also 


in that way take away any inducement they may have 
to put gold to a premium. ' ' 

Mr. Hendrix: Will the gentleman permit an 

Mr. Walker : I will yield for a question. 

Mr. Hendrix: If you provide that the note re- 
demption fund at the Treasury Department shall be 
kept in gold, will not that meet your desire to have the 
banks redeem their notes in gold? 

Mr. Walker: Not at all, or only partially. 
[Laughter.] How much time have I remaining, Mr. 

The Chairman: The gentleman has one minute. 

Mr. Bryan: Mr. Chairman, I ask unanimous 
consent that the gentleman be allowed to proceed for 
five minutes longer. 

There was no objection. 

Mr. Walker: Now, Mr. Chairman, I will ask 
the gentleman from New York to repeat his question. 

Mr. Hendrix: My question is this: Would you 
not be satisfied with having the note redemption fund 
which the national banks are obliged to provide, kept 
in gold at the Treasury, where the banks are required 
by law to redeem? 

Mr. Walker: Do you mean the 5 per cent, 
redemption fund? 

Mr. Hendrix: The 5 per cent, redemption fund. 

Mr. Walker: No, sir. I want to say to the 
gentleman and to the House and to the country that 
the people of the United States propose to keep all 
their dollars of equal value. The people of the United 
States have made a long step in advance in discover- 
ing that it is costing them millions upon millions for 
the United States Government to do this — redeeming 
of paper money at the United States Treasury, not 
maintaining the 5 per cent, redemption, but redemp- 
tion in large blocks. Therefore they are upon the eve 
of making the banks do it at their own risk and at 
their own cost and over their own counters, thus 


relieving the people of the tax of twenty or thirty 
million dollars a year which they now pay for this 
service to banks, and that the banks themselves ought 
to do. 

"Here in this section of this bill is the first step in 
that direction — nine tenths of i per cent, to be kept in 
both kinds of coin — four and a half tenths of i per cent, 
to be kept in gold coin. The banks now hold $1 75, 000, - 

000 in their vaults. When these bankers go to bed at 
night and say their prayers, they say, 'O Lord, we be- 
seech Thee to keep gold from going to a premium to- 
morrow. ' But they know if it does go to a premium 
they will make 2 or 3 or 4 per cent, profit on the gold in 
their vaults. When they get up in the morning they say 
— following the fashion of some prayers which we hear 
at the Speaker's desk and elsewhere, informing the 
Lord what has been done — 'O Lord, we thank Thee 
that gold has not gone to a premium, ' but it is no more 
than human for them to remember, as the night 
before, the profit if it should go to a premium. The 
question is, shall the bankers of this country protect 
every dollar of their own paper circulation at their 
own expense and their own risk and not compel the 
people to be taxed to do it for them at the United 
States Treasury?" 

Mr. Coombs: Will the gentleman allow me an 

Mr. Walker : Yes, if it is short. 

Mr. Coombs: Does not the gentleman by this 
provision put it in the power of the banks and make it 
their duty to hoard gold, thereby holding a larger 
whip over the community than they otherwise would? 

1 submit that this amendment would force the banks 
to become hoarders of gold, instead of leaving it in the 
channels of trade and in the hands of the people. 

Mr. Walker: Now, the gentleman is making 
an argument. If he wishes to do that, let him get his 
own five minutes. It is 'in the channels of trade* when 
it is in bank reserves, as the gentleman well knows. 


**Mr. Chairman, I want to say another thing, which 
I regret to say. I have the very highest respect for 
banks and bankers. I remember the record of George 
Peabody, and of Corcoran of this citv, and hundreds 
of other bankers. Noble men! Many men of this 
class have been the most generous, noble-hearted, 
public-spirited men outside of their business there ever 
have been in this world. But I remember also that 
never in any country, under any circumstances what- 
ever, did the bankers ever improve the banking and 
currency laws or the financial conditions of their 
country except at the point of the financial bayonet, 
held by the Government of the country in which the 
banks were located, namely, by the force of law 
devised in parliament. We have got to adopt that 
policy in this country. 

"Now, I challenge Henry W. Cannon of New York, 
I challenge Lyman B. Gage of Chicago, I challenge 
George E. Leighton of St. Louis — three as honorable 
men as live and as skilled in finance, men who in finan- 
cial matters stand the peers, if not above, any other 
three men in this country — to draw a bill that will do 
what they are saying ought to be done, and lecturing 
us for not doing. Bankers are condemning members 
of Congress as clowns and fools because we do not 
accomplish what they want us to do; yet they them- 
selves could not draw a bill which would do it that 
would get two votes in five in this House in this gener- 
ation or the next. I say we ought not to heed here 
and now the protests of the bankers against their 
being brought into line with the banks of every first- 
class nation of the world. ' ' [Applause. ] 

These extracts, taken from the Congressional 
Record, exhibit several remarkable facts. They show 
that the national banks, while demanding that the 
United States should redeem all its obligations in gold, 
and issue bonds to maintain a gold reserve for that 
purpose, were utterly opposed to being compelled to 


maintain a gold reserve for the redemption of their 

The extreme selfishness of these financial institutions 
is exposed by Mr. Walker, a stanch friend of the national 
banking system, wherein he states that the redemption 
features of the national banking system had cost the 
people from $20,000,000 to $30,000,000 per annum. 
He shows that the cost of this system of redemption 
was thrown on the Government. 

On February 7, 1895, Mr. Springer brought up a 
motion to engross the bill and pass it to a third read- 
ing. This was defeated by a vote of 162 nays 
to 135 yeas. He then moved to reconsider this vote, 
but, on motion of Mr. Hatch, it was laid upon the 
table by a vote of 135 yeas to 124 nays. 

The defeat of the Springer bill was decisive. 

Therefore this measure, which the gold standard 
fanatics openly boasted would be the ** death knell" of 
silver, fell at the hands of the public executioner. 

The grip of this Tory-Republican administration 
was loosened for all time to come. 



"Avoid the acctimulation of debt, not only by shun- 
ning occasions of expense, but by vigorous exertions in 
time of peace to discharge the debts which unavoid- 
able wars may have occasioned, not ungenerously 
throwing upon posterity the burdens which we our- 
selves ought to bear. ' ' — Washington. 

Ever since the special session of Congress, beginning 
on the 7th of August, 1893, the national banks of New 
York City continuously bent all their energies toward 
depleting the gold reserve of the Treasury and forcing 
an issue of bonds. 

Without the active co-operation of these associated 
banks, it would have been impossible for the gold 
speculators to have obtained the greenbacks and treas- 
ury notes to present to the Treasurer for obtaining the 
gold for exportation to Europe. As the national banks 
of New York City persevered in the policy of hoarding 
up all greenbacks and treasury notes, that found their 
way over their counters in the ordinary transactions of 
business, the means of exhausting the gold reserve 
were practically unlimited. In fact, more gold was 
actually shipped abroad than was needed in Europe. 
It was asserted by unquestioned authority, that these 
banks exported tens of millions of gold to Europe, and 
that it was returned without the packages containing 
it ever having been opened ; and that this policy was 
carried on by the banks, with the avowed intention of 
compelling Congress to fund the greenbacks and treas- 
ury notes into bonds. 



One of the reasons stated by the President in his 
message of August 8, 1893, was, that the purchasing 
clause of the Sherman law must be repealed, as the 
only remedy to check the exportation of gold. This 
was the sum and substance of all the arguments, ad- 
vanced in both Houses of Congress, by those who 
urged the repeal of the Sherman law. 

These reasons and arguments were the merest sub- 
terfuges of those public men who were determined, 
at all hazards, to manacle the American people to a 
single standard of gold, and to make all business pay 
toll at the counters of national banks. 

As heretofore stated, the gold gamblers persevered 
in draining the Treasury of its gold during the time 
that the repeal bill was pending in Congress, a policy 
which was upheld by the subsidized press. Every 
withdrawal of gold was given prominence, in these 
journals, as a means of frightening the timid. 

As shown by a report of the Comptroller of the Cur- 
rency, the national banks of New York City, on the 2d 
of October, 1894, held gold coin to the amount of 
$1 75,000,000, in addition to legal tender notes or green- 
backs to the amount of $185,000,000. On the 19th of 
December, of the same year, the bank holdings of 
legal tenders had decreased to $119,513,000. 

These figures demonstrate that, while the banks 
held $175,000,000 in gold, they had used their legal 
tender notes, or greenbacks, in looting the gold reserve 
to obtain gold to buy these bonds. 

In speaking of this course of the bankers in thus 
forcing an issue of bonds, the New York World edi- 
torially said: — 

"The banks have no apparent use for gold. 


*'They have absolutely no obligations of any kind, 
near or remote, which are payable in gold. 

''Nevertheless these banks are hoarding gold in large 
quantities, at a time when to do so is to subject the 
Government to heavy and needless expense. 

"Thus the clearing house banks of New York alone, 
hold over $81,000,000 in gold for which they have no 
use. ' * 

In referring to the immense holdings of gold by the 
New York banks, the World further said : — 

*'If they should turn it into the Treasury and take 
greenbacks instead, they would be in every respect 
as well equipped as now to meet their obligations, 
while the Government would not have to issue another 
$100,000,000 of bonds, which it will cost the country 
$220,000,000 to pay, principal and interest. 

"Are they seriously expecting gold to go to a 

"Or are they and the banks all over the country in a 
tacit "combine" to compel repeated bond issues for 
their speculative profit? These banks ought to answer 
these questions. ' ' 

On the following day, the World, in speaking of the 
answers of the New York bankers to this accusation, 
editorially said: — 

"Their replies are evasive, shifty, insincere. 

"They have no obligations payable in gold. 

"There is no possible reason for them to hoard gold, 
except that they expect a premium upon it, or that 
they wish to force the Government to borrow money 
which it does not need. " 

Although the World was an advocate of the gold 
standard, yet it did not hesitate to censure the banks of 
New York City for their traitorous attempts to cripple 
the United States. With renewed energy, the banks 
persevered in their attack upon the gold reserve, and 
from the 17th day of January, 1895, to February 13th, 


they drew gold out of the Treasury to the amount of 
$38,262,540. In a single day, January 25th, they drew 
out $7,156,046, although at that time these identical 
banks held a stock of gold exceeding $100,000,000. 

The influential Journal of Commerce, charged that 
the New York banks, owing to their combined policy 
to cripple the Government, had purposely caused a 
needless and artificial scarcity of gold to the amount 
of $503,000,000. 

On February 4, 1895, it editorially said: — 

"why must we borrow? 

'*i. Because, while up to 1892 the banks supplied all 
gold required for export, since July i, 1892, they have 
drawn for that purpose from the Treasury, two hundred 
and thirty millions. 

*'2. Because, within the same period, the banks have 
withheld gold from customs, payments which, under 
their former usage, would have given the Treasury a 
gold income amounting to two hundred and seventy- 
three millions. 

**3. Because, within the last thirty-one months, the 
Treasury has suffered from this policy of the banks a 
direct and indirect artificial gold depletion of five hun- 
dred and three millions. 

*'Here, in a nutshell, is the explanation of the con- 
dition of the Treasury and of the causes compelling its 
virtually needless loans. ' ' 

On the other hand, the New York Times, with its 
accustomed loyalty to the money power, urged these 
banks to coerce Congress to do their bidding. It 
said : — 

*'But we close, as we began, with the unqualified 
statement that Congress will not do this — that it will 
not do anything, unless it be forced to action by the 
overwhelming pressure of public opinion. It is sheer 
folly to rely on anything else. This force organized, 


directed, and concentrated upon Congress, as it was in 
the spring of 1891, when the free coinage bill was 
killed, as it was in 1893, when the repeal bill was 
enacted, will do the work. Nothing else will." 

Since the repeal of the purchasing clause of the Sher- 
man law up to this time, gold to the amount of $172,- 
000,000 was withdrawn from the Treasiiry, despite the 
fact that President Cleveland, in his message of August 
8, 1893, gravely declared that the repeal of the pur- 
chasing clause of the Sherman law would stop the 
depletion of the gold reserve. 

On the 17th day of January, 1894, the Secretary of 
the Treasury invited bids for the sale of bonds to 
strengthen the gold reserve. The amount offered was 
fifty millions for sale, and delivery was to be made 
February 3d. 

At the time of this sale of bonds, the banks of New 
York City held many millions of gold, but, instead of 
using their holdings to pay for these bonds, they pre- 
sented treasury notes, and drew out of the Treasury'' 
$20,211,000 in gold to take up these bonds. 

Therefore, while these banks were demanding issues 
of bonds to maintain the public credit, they utilized 
this very issue as a means to further deplete the Treas- 
ury of its gold. 

The Secretary claimed that, under the provisions of 
the Resumption Act, he had full authority to issue 
bonds for the redemption of the greenbacks. The gold 
reserve, thus expanded beyond the one hundred million 
dollar mark, was again attacked by these conspirators 
with the evident purpose of forcing gold to a premium, 
and to compel an additional issue of bonds. 

The gold reserve again began to melt away, and, on 


November 13, 1894, the Secretary of the Treasury 
advertised for bids for the sale of an additional $50,- 
000,000 of lo-year 5 per cent, bonds. Four hundred 
and eighty-seven bids were received for these bonds so 

To pay for these new bonds, immense quantities of 
gold were again withdrawn from the Treasury. United 
States Senator Gray, a gold standard champion, ad- 
mitted this fact in a speech in which he stated that, 
from December i, 1894, to February 13, 1895, $80,785,- 
000 was exchanged for treasury notes, of which only 
$36,852,389 was exported. 

As a matter of fact, a large amount of this was 
hoarded for future purchases of bonds. 

On December 5 th, the reserve had been expanded to 
$111,142,021, and immediately this gold reserve, thus 
freshly built up by this second sale of bonds, was again 
attacked by the New York bankers, by exchanging 
greenbacks for gold at the sub-treasury in New York 

In the beginning of February, 1895, ^^^ withdrawal 
of gold became greater than ever before known, and 
the banks openly avowed their intentions to force a 
third issue of bonds. Meanwhile, it was rumored in 
Wall street, that the Secretary of the Treasury had 
secretly negotiated a sale of bonds to Messrs. Belmont 
and Morgan. 

In speaking of both of these facts, the New York 
Press, of February 7th, said: — 

"gold to buy bonds WALL STREET READY TO ROB 


** Fully $700,000 in gold coin was withdrawn from 
the sub-treasury yesterday. While this is not a large 


amount as compared with other days, it is significant 
and suggestive. It means nothing more or less than 
that the banks and trust companies in the city are pre- 
paring to take up a considerable portion of the pro- 
spective bond issue. 

"But it is more than likely that the banks will get 
even with the Government after all. The quiet gold 
hoarding that is going on just now means that this 
money is to be used to buy the new bonds, and after 
they are once obtained, it will be a comparatively easy 
matter for the purchasers to replenish their vaults and 
safes, with practically the same coin again by means of 
legal tenders. In short, it is only another instance of 
Peter being robbed to pay Paul. 


"Both Mr. Morgan and Mr. Belmont were at their 
offices yesterday, which gave color to the report that 
everything was "fixed" so far as the new issue is con- 
cerned. Mr. Belmont declined to be interviewed, and 
Mr. Morgan had only this to say for publication : ' I am 
satisfied that no announcement of a bond issue will be 
made until after a vote in the House on the Springer 
bill. I am also satisfied that President Cleveland and 
Secretary Carlisle are keenly alive to the situation." 

On February 8, 1895, the Secretary of the Treasury 
negotiated a secret contract with two great banking 
houses of London, England, for the sale of $62,000,000 
of 4 per cent, thirty-year bonds. 

The text of the infamous contract is as follows : — 

"This agreement entered into, this 8th day of Feb- 
ruary, 1895, between the Secretary of the Treasury of 
the United States, of the first part, and Messrs. August 
Belmont & Co., of New York, on behalf of Messrs. N. 
M. Rothschild & Sons, of London, England, and them- 
selves, and Messrs., J. P. Morgan & Co., of New York, 
on behalf of Messrs. J. S. Morgan & Co., of London, 
and themselves, parties of the second part. 


"Witnesseth: Whereas it is provided by the Revised 
Statutes of the United States (section 3,700) that the 
Secretary of the Treasury may purchase coin with any 
of the bonds or notes of the United States authorized 
by law, at such rates and upon such terms as he may 
deem most advantageous to the public interests; and 
the Secretary of the Treasury now deems that an 
emergency exists in which the public interests require 
that, as hereinafter provided, coin shall be purchased 
with the bonds of the United States, of the description 
hereinafter mentioned, authorized to be issued under 
the act entitled 'An act to provide for the resumption 
of specie payments,' approved January 14, 1875, being 
bonds of the United States described in an act of Con- 
gress approved July 14, 1870, entitled *An act to 
authorize the refunding of the national debt. ' 

"Now, therefore, the said parties of the second part 
hereby agree to sell and deliver to the United States 
3,500,000 ounces of standard gold coin of the United 
States, at the rate of $17.80441 per ounce, payable in 
United States 4 per cent, thirty-year coupon or regis- 
tered bonds, said bonds to be dated February i, 1895, 
and payable at the pleasure of the United States after 
thirty years from date, issued tmder the acts of Con- 
gress of July 14, 1870, January 20, 187 1, and January 
14, 1875, bearing interest at the rate of 4 per cent, per 
annum, payable quarterly. 

"First, Such purchase and sale of gold coin being 
made on the following conditions : — 

**i. At least one half of all coin deliverable herein- 
under shall be obtained in and shipped from Europe, 
but the shipments shall not be required to exceed 
300,000 ounces per month, unless the parties of the 
second part shall consent thereto. 

"2. All deliveries shall be made at any of the sub- 
treasuries or at any other legal depository of the United 

"3. All gold coins delivered, shall be received on the 
basis of 25.8 grains of standard gold per dollar, if within 
limit of tolerance. 


"4. Bonds delivered tinder this contract are to be 
delivered free of accrued interest, which is to be 
assumed and paid by the parties of the second part at 
the time of their delivery to them. 

** Second, Should the Secretary of the Treasury de- 
sire to offer or sell any bonds of the United States, 
on or before the ist day of October, 1895, he shall first 
offer the same to the parties of the second part ; but 
thereafter he shall be free from every such obligation 
to the parties of the second part. 

"Third, The Secretary of the Treasury hereby re- 
serves the right, within ten days from the date hereof, 
in case he shall receive authority from Congress there- 
for, to substitute any bonds of the United States, bear- 
ing 3 psr cent, interest, of which the principal and 
interest shall be specifically payable in United States 
gold coin of the present weight and fineness for the 
bonds herein alluded to ; such 3 per cent, bonds to be 
accepted by the parties of the second part at par, i. e. , 
at $18.60465 per ounce of standard gold. 

''Fourth, No bonds shall be delivered to the parties 
of the second part, or either of them, except in pay- 
ment for coin from time to time received hereunder; 
whereupon the Secretary of the Treasury of the United 
States shall and will deliver the bonds as herein pro- 
vided, at such places as shall be designated by the 
parties of the second part Any expense of delivery 
out of the United States, shall be assumed and paid 
by the parties of the second part. 

' ' Fifth, In consideration of the purchase of such coin, 
the parties of the second part, and their associates 
hereunder, assume and will bear all the expense and 
inevitable loss of bringing gold from Europe here- 
under ; and, as far as lies in their power, will exert all 
financial influence and will make all legitimate efforts 
to protect the Treasury of the United States against 
withdrawals of gold pending the complete performance 
of this contract. 

"In witness whereof, the parties hereto have here- 


unto set their hands in five parts, this 8th day of Feb- 
ruary, 1895. 

J. G. Carlisle, 
Secretary of the Treasury. 
August Belmont & Co., 
On behalf of Messrs. N. M. Rothschild & Son, 
London, and themselves. 

J. P. Morgan & Co., 
On behalf of Messrs. J. S. Morgan & Co., London, 

and themselves. 

W. E. Curtis. 

Francis Lynde Stetson." 

If any citizen of the United States doubts that there 
is a great international gold and bond trust, seeking to 
bind the world to its golden chariot, let him read this 
notorious contract and be convinced of his error. 

A construction of this contract discloses the follow- 
ing remarkable facts : First, that two American bank- 
ing companies of New York Cit)^ represented two great 
banking houses of London, England, ^nd Secretary 
Carlisle presumably the United States. Second, the 
gold coin so purchased should be paid into the Treas- 
ury at the rate of 300,000 ounces per month, except 
these foreign firms should agree to make larger 
monthly payments. One half of this gold was to be 
obtained in Europe. Third, the Secretary of the Treas- 
ury bound himself not to offer or sell any bonds of the 
United States to any other parties, on or before the 
ist day of October, 1895, without first offering all such 
bonds to this foreign syndicate. This placed the Gov- 
ernment at the absolute mercy of alien bankers, and 
was a most cowardly surrender of the interests of the 
people to a foreign gold trust. Fourth, the Secretary 
of the Treasury reserved the right to substitute bonds 


Specifically payable in United States gold coin, pro- 
vided Congress should confer authority upon him to 
make such substitution. The purpose of this clause 
in the contract was, should Congress consent thereto, 
to issue bonds specifically payable in gold coin, and 
thus commit the country to an issue of gold bonds. 
Therefore, should the United States issue an obli- 
gation specifically payable in gold, this example 
would be followed by every creditor, and every mort- 
gage, bond, note, or other security or evidence of debt, 
would become a gold obligation, and the nation and 
its citizens would be bound hand and foot, and deliv- 
ered over to the tender mercies of the national banking 
money power and the international gold trust. 

Is there an international gold trust? Clause five of 
paragraph four of this contract is an explicit acknowl- 
edgment on the part of the United States, that there is 
such an institution. That clause is as follows: "In 
consideration of the purchase of such coin, the parties 
of the second* part, and their associates hereunder, 
assume and will bear all the expense and inevitable 
loss of bringing gold from Europe hereunder ; and as 
far as lies in their power, will exert all financial influ- 
ence, and will make all legitimate efforts to protect the 
Treasury of the United States against the withdrawals 
of gold, pending the complete performance of this 
contract. ' ' 

Think of it ! This great nation having resources far 
exceeding the whole of those of Europe, with a popu- 
lation of seventy millions of energetic people, ascer- 
taining that its Secretary of the Treasury had bought 
the protection of a foreign bond syndicate ! 

Let them further ponder, that this syndicate consid- 



ered itself so powerful, that it could protect the Treas- 
ury of the United States against the withdrawals of 
gold therefrom. 

In speaking of this transaction, the New York Tri- 
bune asserted that this syndicate could control the 
money of the world. It said : — 

''No plan that did not provide for getting gold from 
Europe, and that did not also provide a means to check 
shipments of gold to Europe, could give the Treasury 
one dollar of permanent relief. This undertaking to 
change the whole course of exchange, must necessarily 
be expensive, but the syndicate can do it, and the 
Treasury is accordingly benefited." 

As a result thus far of President Cleveland's warfare 
upon silver, we find that this high public officer, who 
wanted the purchasing clause repealed to check the 
withdrawal of gold from the Treasury, made an uncon- 
ditional surrender to the international gold tinist. He 
sought to buy its protection. 

The bonds so issued under this secret contract were 
sold at a premium of only four and one-half cents on 
the dollar. At that time, the same class of bonds hav- 
ing but twelve years to run, sold at a premium of ten 
and one-half cents. In the meantime, it was rumored 
that the administration had entered into a secret 
negotiation with this syndicate, and on the 8th of Feb- 
ruary, 1895, President Cleveland transmitted this con- 
tract to Congress, accompanied by a message, in which 
he requested permission of Congress to substitute a 3 
per cent, gold bond in lieu of the bonds so sold to this 
syndicate. Immediately upon the appearance of this 
message in the House, Mr. Wilson, of West Virginia, 
reported a joint resolution authorizing the Secretary 
of the Treasury to issue gold bonds to the amount of 


$65, 1x6, 275. At the same time, a similar bill was intro- 
duced in the Senate by Mr. Vilas, of Wisconsin. 

During the debate on these measures, it was pointed 
out by the silver advocates that the 4 per cent, bonds 
sold to this syndicate were worth $1,195^, although 
they had been sold at $1.04^^, netting the syndicate a 
profit of not less than $10,000,000 by this transaction. 
It was also charged that the administration had sold 
these bonds to the banking houses of Rothschild and 
Morgan at this low figure, with the express purpose of 
depreciating the national credit with a view of forcing 
an issue of gold bonds. 

The attempt to force the Wilson resolution through 
the House failed by the decisive vote of 167 nays to 
120 years. 

The absurd pretense put forth by President Cleve- 
land and his adherents, that the national credit must 
be strengthened by substituting the term gold, for that 
of coin in its obligations, was fully exposed by subse- 
quent events. 

Ten days after the issue of the original bonds, nearly 
thirty millions of them were sent to London to be sold 
by the syndicate. In twenty-two minutes after these 
bonds were placed on the market, the subscriptions for 
them amounted to ten times the sum total of the bonds. 

To-day, these bonds that were thus disposed of by 
this nefarious contract to a foreign syndicate at §1.04%, 
are now worth $1.29^4 — being an advance of twenty- 
five cents on the dollar! 

Again the bold attempt of President Cleveland to 
fasten the gold standard on the country ignominiously 

On February 7, 1895, one day previous to the com- 


munication of the bond contract, House bill 8,705 was 
brought forward in the House of Representatives. 
This measure proposed to authorize the Secretary of 
the Treasury to issue $500,000,000 of bonds to maintain 
a sufficient gold reserve, and to redeem and retire 
United States notes. 

These repeated attempts of the administration, and 
its satellites in Congress, to burden the people with an 
enormous bonded indebtedness, is one of the most 
remarkable phenomena in all history. It seemed that 
the whole energy of President Cleveland was directed 
with an eye single to loading down the country with a 
vast perpetual debt, even though it would ruin the 
party which had honored him so frequently. He un- 
scrupulously used the immense patronage of his office 
to force his measures through Congress, but beyond 
securing the repealing of the purchasing clause, he 
failed in every instance to coerce Congress into sub- 
mission to his will. He likewise failed in this pro- 
posed bond measure, for, on a motion to engross the 
bill and pass it to a third reading, it was defeated by 
a vote of 162 nays to 135 yeas. 

In a few months after the secret bond contract with 
the Morgan Rothschild syndicate, the attack upon the 
gold reserve began anew, as the bank of England bid 
$4.91 for gold, being equivalent to a premium of one 
per cent, on the dollar. Whenever the bank of England 
desired to increase its stock of gold, it raised the price 
at its counter, and this policy attracted gold from all 
over the world. The usual exchange value of a British 
s'overeign in gold is $4. 86, therefore, by raising the 
price to $4.91, it gave notice to all the world that it was 
offering a premium for gold. 


In August, 1895, while the rate of exchange stood at 
$4.91, the New York bankers raided the reserve to 
obtain gold to ship to London for this premium. In 
that month, $15,000,000 was withdrawn from the 
Treasury and exported to that country. In the follow- 
ing month, the high rate of exchange still continued, 
and the gold gamblers of Wall street drew $16,000,000 
out of the Treasur}^ for exportation. This process still 
continued, and, in the meantime, the administration 
opened negotiations with the banking house of J. P. 
Morgan & Co., for the disposal of §200,000,000 of 
thirty-year 4 per cent, bonds at private sale. 

This brazen attempt of the administration to again 
sell bonds at private sale to this syndicate, at a figure 
away below the market price, brought forth such a 
storm of indignation and protest that even President 
Cleveland quailed before it. 

Therefore, on January 6, 1896, Secretary Carlisle 
issued a circular, inviting proposals for the sale of 4 
percent, thirty-year bonds. The bids received for this 
proposed series of bonds aggregated $568,259,850 — 
more than five times the amount of the bonds offered. 

The Morgan syndicate offered to take the whole issue 
at $1. 1069. This bid was six per cent, higher than the 
syndicate would have paid at private sale, had it been 
consummated. It was a little over six per cent, more 
than the syndicate paid for the issue of the $62,000,000 
of February 8, 1895. There were 780 bids at prices 
higher than that offered by the Morgan syndicate. 

It will be borne in mind that this bid of the syndicate 
for these bonds, at an advance of six per cent, over that 
of the same Morgan-Rothschild syndicate for the issue 
of February 8, 1895, was for coin bonds of the same 


kind as this latter issue. The fact that this syndicate 
was willing to pay several million dollars more for the 
same class of bonds, as those negotiated under the 
secret contract of February 8th, is evidence that the 
objections of President Cleveland to coin bonds, rested 
upon the flimsiest pretense. 

It must be remembered that this increased price was 
offered many months after Congress refused to author- 
ize the Secretary of the Treasury to issue bonds 
specifically payable in gold coin, and that the Mat- 
thews resolution adopted by Congress, January 25, 
1878, declaring that the bonds of the United States 
could be legally paid in standard silver dollars of 412)^ 
grains, was unrepealed, and was in full force and effect 
as declaratory of the financial policy of the United 

The continued efforts of President Cleveland to retire 
the greenbacks and treasury notes, and to issue bonds 
in lieu thereof, seemed to have taken possession of his 
mind with a zeal approaching that of mania. 

His determined attitude on these public questions, 
exercised great influence upon the opinions of many 
Democratic members of Congress. Hence, many of 
the leaders of that party, who, prior to 1892, were 
the most consistent advocates of free coinage of silver, 
suddenly changed their positions upon these important 
questions, and did the bidding of President Cleveland, 
in his attempt to fasten a gold standard and a national 
banking system upon the people, with a zeal that was 
remarkable. Many of these Congressmen were de- 
feated in the election of 1894, and President Cleveland 
manifested his fatherly care for his new-born proteges 
by appointing them to Federal offices; judgeships, 


postmasterships, and various other appointments, were 
handed around to these apostates to Jeffersonian prin- 
ciples, as a reward for their treachery to the people, 
and their fidelity to that man who had sought to disrupt 
that great and historic party, which had taken him 
from obscurity and elevated him to the highest posi- 
tions in the gift of the people. 

The total amount of bonds issued during his admin- 
istration was $262,000,000. 

In the meantime. Secretary Carlisle announced that 
he would redeem silver dollars in gold, should it be- 
come necessary to maintain the parity of the metals. 
The scheme of the national banking money power was 
now consummated, as far as it lay in the power of the 
Secretary, inasmuch as he evidenced a purpose to treat 
more than 500,000,000 standard silver dollars as mere 
credit money, redeemable in gold. This paved the 
way for a demand of the national banks, that the Gov- 
ernment issue sufficient bonds to take up and retire 
this silver money from circulation. 

While President Cleveland was ** working in Con- 
gress" by means of his patronage, the money power 
was working through its various associations and 
through the press to train the people to accept the 
absurd principle, that the question of money did not 
fall within the province of laws and legislation, but 
that its solution rested solely with commerce — that is 
the banking power. 

In a letter written by George S. Coe, President of the 
American Exchange National Bank, one of the most 
powerful in the country, to Jose F. De Navarro, the 
former exhibited his supreme contempt for the powers 
of Congress. The closing sentences of this letter, 
dated April 10, 1893, are as follows: — 


* 'Commerce is larger than governments and will cer- 
tainly prevail over them all. When once this convic- 
tion prevails, we shall all be surprised to see how easily- 
natural laws will conquer local prejudice and legisla- 

This writer who made his wealth and secured his 
fame out of the law-making power of the Government, 
now spurns that constitutional authority, as inferior to 
the unlimited greed of that class of which he is a shin- 
ing light. 

In a speech delivered before the Chicago Bankers' 
Club, April 7, 1895, William C. Cornwall, a leading 
banker of Buffalo, said: — 

"On this silver question the American people are 
beginning to discard the old delusion that law can regu- 
late the value of coin. ' * 

The New York Sun, April, 1895, said: — 

"The issue is between gold and silver as the standard 
of currency, the value of each metal with respect to 
each other and to other Commodities, being totally be- 
yond the power of any financial legislator or conven- 
tion to change. ' ' 

This was the gist of the specious argument of the 
gold standard press and national banking power 
throughout the country. 

The money power became so elated at its success in 
having silver stricken down, that it grew so bold as to 
threaten the political future of any public man who did 
not align himself with that interest. It was abject 
submission or political death. 

In the speech of Banker Cornwall, April 7, 1895, 
from which we have quoted, he said : — 

"The politician, high or low, who to-day turns from 
the straight course of sound money and the gold stan- 


dard, stabs dead once for all every chance of political 
success, especially if he wants to be President. ' ' 

This bold threat was greeted with the tumultuous 
cheers of the bankers before whom this speech was 
delivered. The gold standard press indorsed these 
sentiments of the money power. 

During the remainder of the Cleveland administra- 
tion, the President was wholly unable to carry any of 
his financial projects through Congress. He became a 
leader without a party. Even the Republicans, whose 
financial policies he had so strenuously endeavored to 
force upon the Democracy, seized upon every oppor- 
tunity to severely denounce his management of public 
affairs, despite the fact that their notable leaders had 
warmly defended his course in repeatedly issuing bonds 
to maintain the "parity of the metals. " 

Outside of the clique of national bank presidents, 
trust magnates, stock speculators, bond syndicates, and 
sycophantic office holders, the President had no follow- 
ing worthy of the name of party. 

The facts detailed in the foregoing pages exhibit the 
wonderful prescience and the consummate plans of the 
national banking money power, as follows: — 

1. It secured the partial demonetization of govern- 
ment legal tender currency in 1862-3; 

2. The payment of interest upon a vast bonded debt 
in coin, and, therefore, it obtained absolute control of 
the gold of the country ; 

3. The establishment of national banks to issue paper 
money, which could only be put into circulation by 
building up a creditor and a debtor class ; 

4. The control of the entire volume of money in the 
country, as a means of securing possession of the great 
railway properties, and to organize those mighty trusts 
which now monopolize all production and distribution ; 


5. The demonetization of silver as a means of hold- 
ing the West and South in subjection to its will ; 

6. The consolidation of all great moneyed corpora- 
tions, with the view of subjecting the productive 
energies of the nation to its domination ; 

7. It has joined hands with the money power of Eng- 
land in its efforts to control Federal legislation ; 

8. It had, time and again, used its immense power to 
thwart the will of the people as expressed through 
Congress ; 

9. It has asserted a superiority above all law and the 
Constitution, and has declared that its fiat is more 
powerful than the authority of this nation ; 

10. It has robbed the Government of its highest 
sovereign power — that of issuing and controlling the 
medium of exchange. 


1. The restoration to the Government of the power 
of issuing and coining money. 

2. The permanent destruction of the national bank- 
ing system. 

3. The application of the principles of Jefferson to 
the administration of government. 

*'Oh, beware my fellow-citizens, of stock jobbers or 
banking associations who have an interest as distinct 
from that of the community, as that of drones from that 
of bees. Oh, beware, ye legislators, how you create a 
moneyed aristocracy, as dangerous to government as 
Pretorian bands in Rome, or Janissaries in Turkey. 
Let me repeat that I behold this country as the asylum 
of the afflicted, the sanctuary of the oppressed, on 
which the eyes of philanthropists are everywhere fixed 
with affection and anxiety. Moral feelings, common 
interests, and general principles unite as a band of 
brothers. Whatever appertains to the general welfare 
should emanate from the general Government. This 


is the Spirit of our Constitution — this is the central axis 
upon which the Union must revolve, and any important 
deviation must make all return to chaos. If I am 
assailed for this interference I shall reply, Homo sum 
et nihil humani a me alienum puto." — Thomas Jef- 



"You shall not crucify mankind upon a cross of 
g-old. " — William J. Bryan. 

''It is to the property of the citizen, not to the 
demand of the creditor of the State, that the original 
faith of society is pledged. The claim of the citizen 
is prior in time, paramount in title, and superior in 
equality." — Edmund Burke. 

The course of President Cleveland, in his continued 
and energetic efforts to revolutionize the principles of 
the Democracy, and to commit that party to the 
espousal of the national banking money power was 
disastrous in the extreme. 

As stated, the Congressional elections of 1894 went 
overwhelmingly in favor of the Republicans, and they 
carried the House of Representatives by a tremendous 

Notwithstanding this great reverse, he persevered in 
his financial policy to the last, and he boldly and 
unscrupulously prostituted the immense official patron- 
age at his disposal, to force his views upon the millions 
of the rank and file of that party which he had prac- 
tically disrupted. Strenuous efforts were put forth by 
the national banking, stock-gambling, gold standard, 
and office-holding element, to elect a sufficient number 
of delegates to the coming national convention, and 
thus dictate the platform, and align the party in com- 
pliance with the views of the administration. 

While the administration and its satellites were 
bending their whole energies to accomplish this design, 
the associated banks, particularly of the East, as here- 


CAMPAIGN OF 1 896. 461 

tofore, laid their plans to manipulate the conventions 
of both the leading political parties. 

In the early part of 1896, a large number of bankers 
met at the Murray Hotel in New York City, and after 
adopting a series of resolutions denouncing the free 
coinage of silver, announced their plan in the following 
language : — 

"Resolved, That we urge upon the delegates to the 
national conventions of both of the political parties, 
the necessity of insisting on such action as will secure 
a plain and unequivocal declaration on the main- 
tenance of the present gold standard. ' ' 

On March 23d, the American Bankers' Association 
issued the following instructions to the bankers of the 
country : — 

The American Bankers' Association, 
2 Wall Street and 90-94 Broadway, 
New York, March 23, 1896. 
**To the Bankers of the United States:— 

*'At a meeting of the Executive Council of the 
American Bankers' Association, held in this city, on 
March 11, 1896, the following declaration was made by 
a unanimous vote : — 

"The Executive Council of the American Bankers' 
Association, declare unequivocally in favor of the main- 
tenance of the existing gold standard of value, and 
recommend to all bankers, and to the customers of all 
banks, the exercise of all their influence as citizens in 
their various states, to select delegates to the political 
conventions of both great parties who will declare 
unequivocally in favor of the maintenance of the exist- 
ing gold standard of value. 

"Your influence is earnestly requested to give prac- 
tical effect to this action. 

Eugene H. PuUen, President. 
James R. Branch, Secretary. 
Joseph C. Hendrix, 
Chairman Executive Council. ' ' 


Pursuant to these instructions, the associated banks 
actively began operations to secure a sufficient number 
of delegates who would embody the demands of the 
bankers in the platforms of both great political parties. 

While the national bankers and their allied interests 
were thus actively engaged in manipulating the selec- 
tion of delegates to the two great conventions, the 
Democratic rank and file were even more vigilant to 
checkmate these schemes, and they finally succeeded 
in defeating the machinations of this Hessian money 
power, which had hitherto thrown its strength to the 
party that gave them the greatest pecuniary benefits. 

On the 1 6th of June, the Republican National Con- 
vention met in St. Louis to select its standard bearers. 

Hon. C. W. Fairbanks, of Indiana, a very wealthy 
railroad lawyer, from which fact he received great 
consideration as a coming leader of his party, was 
chosen Temporary Chairman of the convention. 

Hon, John M. Thurston, of Nebraska, was honored 
with the Permanent Chairmanship. 

The significance of Mr. Thurston's selection to pre- 
side over this convention will be appreciated, from the 
fact, that he was the general legal counselor of the 
Union Pacific Railway Company — a corporation whose 
corrupt practices have done more to debauch Western 
courts and legislatures than any other agency in the 

Suffice it to say that this great corporation, built by 
the munificence of Congress, gave birth to that gigan- 
tic scandal of the age, the Credit Mobilier, which 
caught in its meshes a Vice-President of the United 
States, and many distinguished Senators and Repre- 
sentatives of Congress. 

CAMPAIGN OF 1 896. 463 

A great number of the Western Republicans, led by- 
Senator Teller, made a desperate struggle to obtain 
recognition for the free coinage of silver. They were 
overwhelmingly defeated and therefore withdrew from 
the convention. 

The financial plank of the platform declared against 
the free coinage of silver, unless it could be secured 
by an international agreement with the leading com- 
mercial nations of the world, and, in case of failure to 
obtain such agreement, the existing gold standard 
should be maintained. 

This expression in favor of an international agree- 
ment, was the merest subterfuge on the part of the 
gold standard element, to obtain the votes of those 
Republicans who favored free coinage. 

H. H. Kohlsaat, of the Chicago Times-Herald, was 
influential in securing the adoption of the money 
plank. In speaking of the language of this plank, the 
correspondent of that paper, who was present during 
the St. Louis convention, used the following language 
with reference to the labors of Mr. Kohlsaat in secur- 
ing its adoption. He said : — 

*'The qualifying words used by the committee, pledg- 
ing the party to endeavor to promote an international 
agreement, are intended to strengthen the platform 
from the political point of view without in any way 
weakening it as a frank and fearless declaration for 
the gold standard. As it is and has been, the Repub- 
lican policy to promote international bi-metallism, and 
as such bi-metallism is earnestly desired by almost 
every one in the country of both parties, nothing is 
lost and something is gained by giving the Western 
Republicans a ray of hope in the future. ' ' 

On the 6th of June preceding, this man Kohlsaat, 


who had written the Republican platform, made the 
following editorial reference to international bi- 
metallism. He said: — 

"Any reference to an international agreement is 
shifty and futile. It deceives nobody because every- 
body knows, first, that there is not the slightest pos- 
sibility of an international agreement at any ratio; 
and, second, that if such an agreement were formally 
entered into, no Government could be bound to abide 
by it a day longer than its own industrial and com- 
mercial interests would appear to warrant. ' ' 

It will be seen that Mr. Kohlsaat, on the 6th of 
June, declared an international agreement as "shifty 
and futile." 

On the 1 6th of June he embodied this "shifty and 
futile" scheme into the form of a solemn declaration 
of party principles ! 

It was evident that Major McKinley, of Ohio, was 
the prime favorite of the majority of the Republican 
delegates for the Presidential nomination. 

The chief manager of Mr. McKinley's canvass for 
the nomination of President before the Republican 
Convention, was the noted Marcus A. Hanna, of 
Cleveland, Ohio. Mr. Hanna was a multi-millionaire, 
and he displayed a marked interest in securing the 
financial and political success of Major McKinley. It 
was due to the organization effected by Mr. Hanna, 
that the candidacy of Major McKinley received that 
impetus that carried him successfully to the first place 
on the ticket as the standard bearer of the Republican 

In fact, Mr. Hanna became the Warwick of American 

CAMPAIGN OF 1896. 465 

Major McKinley first attained political prominence 
as a member of the national House of Representa- 
tives, to which he was first elected in 1876. He voted 
for the free coinage measure as originally introduced 
by Mr. Bland, and gave his support to the Bland- Alli- 
son Silver Coinage Act of 1878. When President 
Hayes vetoed this bill, Mr. McKinley gave his vote to 
pass the bill over the veto. 

In 1878, he supported the Matthews Resolution, 
which declared that United States bonds were legally 
payable in standard silver dollars. 

In 1890, he voted for the so-called Sherman Silver 
Purchasing Law. 

In a speech at Toledo, Ohio, in 1891, he severely 
censured President Cleveland for his antagonism to 
the silver dollar, and stated that, "During all the 
years Mr. Cleveland was at the head of the Govern- 
ment, he was engaged in dishonoring silver. ' ' 

Mr. McKinley's chief fame, however, grew out of 
his untiring advocacy of the benefits to be derived 
from a high protective tariff. The McKinley Tariff 
Act of 1890 has become history. 

For Vice President, the convention selected Garrett 
A. Hobart, of New Jersey. Mr. Hobart had not been 
very prominent in politics until his nomination for this 
high office. He was a distinct representative of the 
corporate interests of the East, and it was said he was 
a director and stockholder in forty-five different cor- 
porations, such as railways, street railways, national 
banks, and the like. He was also an arbiter in that 
gigantic trust, known as the Joint Traffic Association, 
composed of thirty-three great railroads entering New 
York City. These railroads were mainly owned and 
operated by British capitalists. 



The nomination of Mr. Hobart was supposedly 
designed with the view of attracting heavy contribu- 
tions from the trusts, combines, and corporations of 
the East to aid in carrying the elections. 

Meanwhile, the Western and Southern Democracy 
broke away entirely from the leading strings of the 
East, and gave unequivocal notice to that section that 
its dominating influence had ceased, and that an adjust- 
ment of the party was needed to plant it on the time- 
honored principles of Jefferson and Jackson. 

The desperation of the administration element 
became greater than ever, which fact was abundantly 
evidenced by the high-handed methods of Don M. 
Dickinson in Michigan, who, with the aid of a host of 
federal officers, actually overrode the will of the 
Democracy in the selection of gold standard delegates. 

His use of the federal patronage in that state, to 
overawe the free expression of the people, aroused the 
greatest indignation throughout the country. 
^ In the state of Nebraska, the office-holding Cleve- 
land element, led on by J. Sterling Morton, was ex- 
tremely jealous of the wonderful popularity of that 
splendid young tribune of the people — William Jen- 
nings Bryan. 

In the early part of July, the party leaders gathered 
at Chicago, where the convention was to be held, to 
make a choice of its standard-bearers. 

When the convention was called to order, July 7th, 
the National Committee, a majority of whom were 
friendly to the money power and the single standard of 
gold, presented the name of Senator David B. Hill, of 
New York, as its choice for Temporary Chairman of 
the convention 

CAMPAIGN OF 1896. 467 

This action was strictly in harmony with party 
usage, but the stern and determined men who made 
up the vast majority of the delegates thereto, knew 
that this was the initial step of the gold standard 
element to obtain control of the convention. 

The free coinage element refused to acquiesce in the 
selection of the committee, and Senator John W. 
Daniel, of Virginia, was brought forward as the 
choice of those delegates who were utterly opposed to 
national banks and the gold standard. 

Upon a roll call of the convention, the candidacy of. 
Senator Daniel was successful by a vote of 556 to 349 
for the New York Senator. 

Upon taking the chair, the Virginian Senator deliv- 
ered one of the most eloquent and notable speeches 
ever heard in any body. 

The seats of the regular delegation from Nebraska, 
headed by the eloquent Bryan, were contested by a 
contingent of federal office-holders. In the hearing 
of this contest before the National Committee, it did 
the bidding of the administration, and ousted the 
Bryan delegates and had seated the contestors. 

This action of the Committee in unseating the reg- 
ular delegates was carried before the convention on 
appeal, and its decision was reversed by a decisive 
majority, and the regulars were admitted to their seats. 

This effort to nullify the will of the people of 
Nebraska, came to an ignominious end. 

The Michigan gold standard delegates, headed by 
that shrewd manipulator, Don M. Dickinson, were 
unseated, and the contestees were admitted to a voice 
in the deliberations of this convention. The great 
struggle arose upon the report of the Committee on 


Resolutions, which had brought forward declarations 
in favor of the free and unlimited coinage of silver, 
without waiting for the aid or consent of any other 
nation on earth. The ratio was fixed at i6 to i. 

Another plank of the platform criticised the Federal 
Supreme Court for its reversal of its late decision on 
the income tax law, one of the most just measures 
ever enacted by Congress. 

Government by Federal Court injunction was 
severely denounced, . on the ground that this system of 
jurisprudence was the means by which corporations 
wreaked their vengeance upon their striking employes! 

Under this process of the courts, trial by jury was 
abrogated, and the Federal Judge had unlimited power 
to try, convict, and execute his unrestrained will upon 
helpless men. 

Moreover, the Federal judiciary was the mainstay 
that upheld the aggressions of corporations upon the 
rights of the people. The great majority of the Fed- 
eral judges were, prior to their appointment to these 
responsible positions, corporation lawyers, and had 
secured their positions through the influence of rail- 
ways and trusts. 

In a celebrated case in one of the Eastern states, the 
United States District Attorney instituted a suit 
against a great railway trust, with a view of having 
its organization declared illegal under the provisions 
of that absurd so-called Sherman Anti-Trust law. He 
presented his bill to eight different United States 
District and Circuit Judges. 

Out of these eight supposed infallible organs of the 
law, the district attorney discovered that seven of 

CAMPAIGN OF 1896. 4^9 

these high functionaries held stock in the various rail- 
roads composing this gigantic trust. 

Is it strange that the people had lost faith in the 
Federal judiciary? 

A strong declaration was adopted, denouncing that 
Tory- Re publican system of finance — the national 
banking system. 

In the debate upon this report of the committee, 
Mr. Bryan had the closing speech, and his magical 
eloquence carried the convention by storm, and he 
easily became the most conspicuous figure in that 
body of great men. 

Upon roll-call, the report of the committee was 
adopted by a decisive majority. As a concession, the 
administration element pleaded for an endorsement of 
President Cleveland, but it was voted down by a 
nearly two-thirds vote. 

Thus, this gathering of distinguished leaders of 
Jeffersonian principles utterly repudiated the policy of 
President Cleveland, and vigorously rebuked his 
methods in attempting to handcuff the Democracy to 
the gold standard. 

He, who was, in 1892, the chosen idol of that great 
historic party, was now given notice that it had no lot 
or part with him. 

As a result of the deliberations of the convention, 
William J. Bryan was nominated for President, and 
Arthur Sewall, of Maine, for vice-president. 

Mr. Bryan was a Democrat of the old school, and 
was a warm admirer of the principles and achievements 
of Jefferson and Jackson. He had served four years 
in the House of Representatives with distinguished 
ability, where he easily carried off the palm for 


eloquence. His speeches in behalf of tariff reform, 
the free coinage of silver, and those opposing the single 
standard of gold, the issue of bonds in time of 
peace, and the enlargement of national banking pow- 
ers, were marvels of logic, argument, and noble 

Mr. Sewall was a distinguished citizen of Maine, and 
had been a life-long advocate of the free coinage of 

The silver Republicans and the Populist party 
endorsed the candidacy of Mr. Bryan, and combined 
their patriotic efforts with those of the Democracy, to 
wrest the control of the country from the plutocracy 
of the East. 

On September 2d, the Cleveland, or gold standard, 
national banking faction of the Democratic party, met 
at Indianapolis, ostensibly to place a Presidential ticket 
in the field. These bolters made no secret of their 
intentions to defeat the regular Democratic ticket at 
all hazards. 

Foremost among these bolters was Ex-Governor 
Flower, of New York, who had served in Congress, 
and who had earned a fine political reputation for his 
admirable administration as the chief executive of 
New York. He, however, trained with the stock 
gamblers of Wall street, where he was recognized as 
one of the heaviest operators on the Stock Exchange, 
and where he had amassed a fortune of many millions 
in speculating in stocks and bonds. He was a firm 
believer in the gold standard and the national bank- 
ing systerti. 

In his speech before the Indianapolis convention — 
composed, as it was to a very large extent, of Federal 

CAMPAIGN OF 1896. 47 1 

office-holders, national bankers, money lenders, pro- 
moters Oi trusts, stock gamblers, and would-be aristo- 
crats — Mr. Flower referred to the principles of Jeffer- 
son and Jackson, of which he asserted that the body 
which he addressed were the true representatives, and 
denounced the Chicago platform as a departure from 
the traditions of Democracy! 

The Indianapolis platform declared in favor of the 
gold standard and the national banking money power. 

Gen. John M. Palmer, of Illinois, was nominated for 
President; and General Buckner, of Kentucky, was 
chosen as his colleague on the ticket. 

The nomination of General Palmer was made with a 
view of attracting votes from the soldier element of 
the North; that of General Buckner to obtain the 
support of the Ex-Confederate element in the South. 

During the first part of this memorable campaign, 
the tide was flowing mightily in favor of the regular 
Democratic nominees, and the success of the ticket 
seemed certain. 

It was then that the strategy of Chairman Mark 
Hanna, of the Republican National Committee, came 
to the rescue of McKinley, by calling into requisition, 
the moneyed assistance of the gigantic corporate inter- 
ests of the nation. 

The great railway corporations, controlled to a very 
large extent by British capital, organized their hun- 
dreds of thousands of employes into "sound money" 
clubs, who were plainly given to understand that fur- 
ther employment depended upon the success of the 
Republican candidates. 

The loan and mortgage companies of the East, hold- 
ing billions of dollars of mortgages on the farm lands 


of the West and South, notified their debtors, that, in 
the event of the success of Mr. Bryan, they would 
close in on them and sell them out ; but that if Mc- 
Kinley was elected, these mortgages would be renewed. 

The immensely wealthy life insurance companies 
flooded the country with millions of letters, urging 
their policy holders to support McKinley and Hobart, 
and these philanthropic corporations stated, in these 
documents, that they did not wish to be compelled to 
pay their policies in "cheap dollars." This scheme 
was very effective. 

The saving banks, and building and loan associations 
were also guilty of this deception. Thousands of 
banks notified their multitudes of borrowers, that it was 
necessary to elect the Republican ticket in order to 
obtain a continuation of banking favors. 

This species of coercion reached hundreds of thou- 
sands of business men, and it was in turn communi- 
cated to their employees. 

Individual lenders carried out the same policy, and, 
in many cases, legal process was brought to bear 
against those debtors who refused to surrender up 
their manhood, at the behest of these minions of des- 
potism. ^ 

Manufacturers fell in line at the command of Mark 
Hanna, and exhibited large orders for their manu- 
factured products, calling the attention of their em- 
ployees to a stipulation, common to these contracts, 
providing for their cancellation in case of the election 
of Bryan. 

Millions of money were poured into the campaign 
fund to elect the Republican ticket. 

In the meantime, the gold standard bolting Demo- 

CAMPAIGN OF 1896. 473 

cratic newspapers and speakers, near the close of the 
campaign, openly advised their followers to vote for 
McKinley and Hobart, and thus secure the adoption 
of ** sound money." 

Such were the rascally, desperate, treacherous, and 
tyrannical schemes, hatched by the criminal minds at 
the head of the national banking money power to win 
this election as a means of perpetuating its reign. 

As a necessary result of this campaign of fraud, 
lying, coercion, and intimidation, practiced upon the 
people, the Republican ticket was elected, receiving 
271 electoral votes, to 176 for Bryan and Sewall. 

One remarkable feature of this election was the 
enormous increase in the vote in the states of Iowa, 
Michigan, Wisconsin, Illinois, Indiana, Kentucky, 
Ohio, and West Virginia, all of which were carried for 
McKinley and practically assured his election. 

Immediately upon the results of the election becom- 
ing known, the national banking money power made 
known its demands through the press. 

On the day succeeding the election, Lyman J. Gage, 
President of the First National Bank of Chicago, came 
out in an interview published in one of the leading 
Chicago papers, in the course of which he stated that 
sufficient bonds should be issued to take up all the silver 
dollars in circulation, and the bullion composing them 
should be thrown upon the market and sold as "junk" ; 
that the greenbacks and treasury notes should likewise 
be taken up by an issue of bonds and destroyed; 
that a billion of bonds payable in gold, and running 
for one hundred years, and exempted from taxation, 
should be issued as a basis for national bank currency. 



This is an example of that mad greed that rejoiced in 
the election of McKinley. 

The President- Elect was duly inaugurated^ 

His cabinet consisted of the following: — for Secre- 
tary of State, John Sherman; for Secretary of the 
Treasury, Lyman J. Gage, of Illinois; for Secretary 
of War, Russell A. Alger, of Michigan ; for Secretary 
of the Navy, Ex-Governor Long, of Massachusetts; 
for Postmaster General, James A. Gary, of Maryland; 
for Secretary of Agriculture, James Wilson, of Iowa; 
for Attorney-General, Judge McKenna, of California. 
With possibly one exception, the members of this cab- 
inet were noted for their enormous wealth. 

The appointments of Mr. Alger to the Secretaryship 
of War excited considerable criticism, as he had never 
displayed any unusual talents as a public adminis- 
trator. His brief war record was inglorious, as the 
military reports of General Sheridan, Merritt, and 
Custer, prove. The methods by which he obtained his 
great wealth, can be ascertained by a perusal of the 
Supreme Court Reports of Michigan. In a celebrated 
case before this court, in which Mr. Alger was a lead- 
ing party, the opinion of this tribunal, as announced 
by Justice Sherwood, is a scathing arraignment of 
the business methods of the present Secretary of War. 

The appointment of Mr. Sherman to the head of the 
State Department, was a clever piece of strategy to 
secure a vacancy in the United States Senate, to 
which Marcus A. Hanna was appointed. As United 
States Senator from Ohio, Mr. Hanna is recognized as 
all powerful with the administration. 

Shortly after his induction into office, President 
McKinley called a special session of Congress, which 

CAMPAIGN or 1896. 475 

reformed the tariff by the passage of what is known 
as the "Dingley Bill/' 

This tariff bill raised the duties on imports higher 
than ever before known, with the result that this 
measure has received the nickname of "Dingley's 
Deficit," by reason of the enormous falling off of 

In the meantime, President McKinley had appointed 
Senator Wolcott, of Colorado, Ex- Vice President 
Stevenson, and General Paine, of Boston, as an inter- 
national commission to proceed to Europe, and obtain 
the consent of the Powers to enter into a treaty to 
secure that ** shifty and futile" experiment — intema- 
tonal bi-metallism. 

While this commission was abroad, hobnobbing with 
foreign potentates, Secretary Gage incubated a scheme 
of banking which he laid before the special session 
of Congress, accompanied by a report in which he 
stated that his bill proposed "To commit the country 
more thoroughly to the gold standard. ' ' 

Upon a knowledge of this scheme of banking 
reaching London, the Wolcott Commission found itself 
in a dilemma, for, while it was endeavoring to secure 
international recognition of silver, the administration 
had come squarely out for the gold standard. It was 
a dastardly stab in the back on the part of the ad- 

The British press greeted the efforts of the Wolcott 
Commission with gibes and sneers, and pointed to the 
Gage banking bill as evidence that its mission was a 

In addition to the Gage banking scheme, various 
other plans of currency reform (?) were brought forward, 


all of which aimed at the elimination of the greenbacks 
and treasury notes from circulation, and the substitu- 
tion of a bank currency in lieu thereof, the Government 
to be the guarantor and redeemer of these proposed 
bank notes. One of these schemes was concocted by a 
convention held at Indianapolis, composed of national 
bankers, gold Democrats, trust magnates, corporation 
lawyers, and men of that ilk. One Hugh H. Hanna, 
nephew of Mark Hanna, was the moving spirit who 
formed the plan that resulted in the calling of this 
self-constituted body of legislators. 

As the Senate is strongly in favor of the free and 
unlimited coinage of silver, without waiting for the aid 
or consent of any other nation, it is now evident that 
none of these robber schemes of finance, can be passed 
by that body under the fraudulent and delusive cry of 
*' currency reform. ' ' The upper House is now the safe- 
guard of the nation. 

In the latter part of 1897, after the passage of the 
Dingley Bill, heavy reductions of wages were made in 
the large cotton mills of the New England States, even 
the city where he of Dingley fame resides, did not 
escape from the general cut of rate of wages. 

The same policy is being carried out in the iron 
manufacturing districts, and the railway corporations 
are engaged in the same process of restoring "pros- 
perity. ' ' 

On the 29th of January, 1898, the millionaire aristo- 
cracy of the East, gave a costly and gorgeous banquet 
in the most fashionable hotel of New York City. 
President McKinley was the guest of honor at this 
gathering of the plutocratic element of New York City, 
and entertained his hosts with one of his usual homilies, 

CAMPAIGN OF 1896. 477 

in which much was said about ** prosperity, ' ' the "main- 
tenance of the public faith," the "upholding of the 
nation's honor," and other stereotyped phrases. 

He committed his administration to the maintenance 
of the gold standard and in favor of currency reform. 
By the latter phrase, he undoubtedly referred to some 
one of the various schemes of banking concocted by 
Secretary Gage, Hugh H. Hanna, Representative 
Fowler, and other would-be reformers of the currency. 

The speech of President McKinley was highly grat- 
ifying to the Tory press of Great Britain. 

On January 31, 1898, a leading gold standard paper 
of Chicago, published a cablegram from London, 
headed as follows: — 

"American stocks advance." "McKinley's speech 
pleases British speculators and investors. ' ' 

The article goes on to show that American railway 
stocks led the market, and that Spanish bonds rose in 

On the same page of the journal, from which we 
have quoted, is a special dispatch from New* Castle, 
Delaware, exhibiting an awful state of affairs among 
the working people of that city. 

This article is headed as follows : — 

"Dire want in New Castle, Delaware." "Six fam- 
ilies found starving — six hundred idle iron workers. ' ' 

This dispatch goes on to show that the families of 
six hundred idle iron workers were crying for food, and 
that fifty families had left the town in a single week 
to escape starvation. 

Starvation for honest Americans, wealth for British 
stock gamblers and speculators. 

This is an illustration of the effects of the policy of 


President McKinley, who, during the campaign of 
1896, struck an impressive attitude before the cheer- 
ing multitudes, and told them that the only means of 
restoring prosperity were to "open up the mills." 

In the meantime, trusts and other illegal combina- 
tions of capital continued to multiply with alarming 
rapidity, having for their object the absolute monopoly 
of production and distribution. 

Foremost was that colossal railway trust, the Joint 
Traffic Association, with a capital of more than 
^2, 000, 000, 000, and organized through the efforts of 
J. Pierpont Morgan, the American agent of British 
capitalists. To a very large extent, this association 
was formed out of the railways wrecked during the 
panic, and whose stocks were purchased by these for- 
eign capitalists at a mere fraction of their former 

To place before the reader the immense possibilities 
for oppression that is within the power of a combina- 
tion like the Joint Traffic Association, the fact should 
be constantly kept before him, that single railways 
have been empowered, by unjust discriminations in 
freight charges between different localities, to blight 
the prosperity of towns, cities, and even whole sec- 
tions of the country, and to build up more favored 
points on the ruins of the former ; that these corpora- 
tions have, by systems of secret rebates, bankrupted 
tens of thousands of enterprising citizens, while a few 
favored shippers have been enabled to create the 
most gigantic monopolies of any age, and to accumu- 
late the wealth earned by the toil of millions. It is 
true that this railway trust was declared illegal by a 
late decision of the Federal Supreme Court by a vote 

CAMPAIGN OF 1896. 479 

of five to four of the Judges composing that tribunal. 
The decision was scarcely announced, ere the pro- 
moters of this combination publicly declared their 
intention to "move on Washington," and obtain the 
passage of a pooling law to avoid the effect of the 
ruling of the Court. 

To give their avowed purpose the apparent sanction 
of public opinion, the managers of the railways com- 
posing this trust are now circulating petitions among 
their employes for their signatures, requesting Con- 
gress to enact a law to legalize trusts, and, as a con- 
sideration for these signatures so obtained, the rail- 
ways agree not to oppose legislation demanded by their 
workingmen. This is coercion patterned after that of 

At the present time, there are hundreds of trusts in 
full operation, and they have become so menacing to 
the rights of the people, that the public press is de- 
manding prompt action against these combinations by 
the Federal Government. 

In almost every instance, the promoters and man- 
agers of these trusts are closely identified with the 
national banking money power. 

The national banks of New York City, Boston, and 
other commercial centers are combining their assets, 
now aggregating more than $4,000,000,000, under 
single managements. 

Flushed with political success in 1896, the privileged 
money power and the trusts are reaching out to con- 
trol the influential colleges and universities of the 
land — seats of learning whose precincts should be 
sacred to the dissemination of knowledge — but which 
are now sought to be made instrumentalities to uphold 
the tenets of an aggressive plutocracy. 


In the early part of 1897, occurred the most notable 
instance of this attempted perversion of these centers 
of learning, in which it was sought to humiliate the 
learned and distinguished E. Benjamin Andrews, 
President of Brown University. 

Be it remembered that this renowned institution 
was placed in the front rank of American colleges 
mainly through the ability of Professor Andrews. 

The minions of corporate greed regarded this 
scholar and educator as a shining mark against which 
to direct their attacks, and incidentally to pattern this 
university after that of Oxford, England, which has 
always been the servile apologist of kingly tyranny. 

This last mentioned institution was a school, which, 
for centuries, taught the infamous doctrine that kings 
rule by divine right, and that they can do no wrong. 

To quote the language of Pope: *'The divine right 
to govern wrong" was the special birthright of British 
kings according to the tenets of Oxford. 

At the command of the dissolute Charles II. , it had 
exiled its greatest ornament, John Locke; and had 
committed the sublime works of Milton to the flames, 
because this great man advocated the rights of con- 
science, the liberty of thought, and the enlightenment 
of the masses. 

We aver that no right-minded American citizen is 
desirous that Brown University, or any other Ameri- 
can school, should degenerate into a mere organ of a 
privileged class. 

President Andrews was a distinguished advocate of 
the. free and unlimited coinage of silver, and his works 
in behalf of that principle were regarded as among the 
ablest ever written. As an author, he dealt the gold 

CAMPAIGN OF 1896. 481 

monometallists some very hard blows, and it was 
determined to punish him for exercising the common 
rights of an American citizen. 

President Andrews, in his official capacity, never 
sought to impress his financial views upon the students 
of the University. 

During his absence in Europe, whence he had gone 
for a much needed rest, the son of John D. Rocke- 
feller, the Standard Oil magnate, who is reputed to 
be. the wealthiest man in America, graduated from the 

By some means, it was caused to be rumored that 
Mr. Rockefeller, upon the graduation of his son, had 
proposed to bestow the munificent sum of $1,000,000 
upon the University, but, owing to the free coinage 
views of the President thereof, he had abandoned his 
alleged beneficient purpose. 

This was merely affording a pretext to depose Pres- 
ident Andrews from the head of this great institution. 

At the first meeting of the Board of Trustees of the 
college, while President Andrews was still absent in 
Europe, Hon. Joseph H. Walker, a Representative in 
Congress from the Third District in Massachusetts, 
introduced a resolution demanding the resignation of 
the President, on the ground that his advocacy of free 
coinage had resulted in a loss of $1,000,000 to the 
University I 

The action of Congressman Walker was vigorously 
supported by a multi-millionaire cotton manufacturer 
of Rhode Island, who, in his remarks supporting the 
resolution, spoke indignantly of the conduct of Presi- 
dent Andrews as undermining the morals of the stu- 


dents, by advocating "cheap dollars" and attacking- 
the "public honor!" 

This disreputable scheme, by which it was sought to 
humiliate Professor Andrews by deposing him from 
the Presidency, aroused a storm of criticism within 
the United States, and these distinguished defenders 
of the "public faith" drew back appalled, from the 
tempest of popular wrath. 

This wealthy manufacturer, who displayed such 
anxiety to "Maintain the public faith untarnished," 
who would be judge, jury, and executioner of the 
absent President, manifested his great humanity by 
reducing the wages of his thousands of employes six- 
teen per cent. 

The only hope of the producing classes is a rise in 
prices, and the prospects are that, owing to a general 
failure of European crops in 1897, the demand for 
American farm products will be so extensive as to 
greatly enhance the value of our exports of bread 

Should this desirable condition occur, it will be only 
temporary relief, and it will afford the national bank- 
ing, gold standard money power, an opportunity to 
point to the imports of gold, sent here for the purchase 
of our surplus farm products, as an argument that the 
volume of money is ample for the needs of business, 
although the rise in prices sweeps away the argument 
that gold is a stable money. 

The Presidential election of 1900 is destined to be 
the most important in our history, inasmuch as the 
national banking system will expire by limitation of 
law in 1904, hence, the corporations composing this 
system will bend every energy to secure a renewal of 

CAMPAIGN OF 1 896. 483 

the law authorizing a continuation of this privileged 

The coercive tactics of the money power, by which 
a victory was won in 1896, will not be a circumstance 
compared to the gigantic efforts that will be put forth 
to win a triumph in 1900. 

It behooves every citizen of this great republic to 
verse himself in the principles of free government, to 
watch diligently the trend of public opinion, to scan 
the proceedings of legislative bodies, to familiarize 
himself with the character of the public men who 
aspire to be the legislators of the people, that he may 
cast his vote in a manner becoming an American 




HG Walbert, Martin '•■ietzel 

2555 The coming battle